CFIB foresees recession in Canada, with economic contractions in Q2 and Q3

Canadian Press

Published Jul 24, 2025 • Last updated Jul 24, 2025 • 1 minute read

A worker welds steel in Burnaby, B.C., on Thursday March 29, 2018. Photo by DARRYL DYCK /THE CANADIAN PRESS

The Canadian Federation of Independent Business is forecasting a recession in Canada this year.

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A new report from CFIB shows it’s forecasting that growth declined 0.8 per cent in the second quarter and will contract by a further 0.8 per cent in the third quarter.

The group says an analysis of the impact of tariffs on supply chains highlights that most firms are anticipating long-term disruptions.

CFIB chief economist Simon Gaudreault says the uncertain trade situation is impacting business confidence, resulting in paused or cancelled investments.

Private investment is expected to fall 13 per cent in the second quarter and continue to decline by 6.9 per cent in the third quarter.

Despite the anticipated downturn, CFIB highlights that inflation remains stable, putting the Bank of Canada in a better position to consider easing borrowing costs in the second half of the year.

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