Components of GDP % Change, Q2 2025

A 7.5% decline in exports is leaving a 0.4% hole in Canada’s Q2 GDP.

Canadian households and government are doing their part (spending is up by more than 1% each) but filling the hole left by exports will require a massive policy response by government and both public and private sector investment. We need infrastructure investment, policy to support developing value-added industry (think processed lumber for housing, aluminum processing in Quebec, processing canola, support for a healthy and thriving population).

We’re going to have to go all in on Canada in order to have a fighting chance at making up the difference that the drop in demand for our exports has already caused.

This may sound alarmist but I am actually hopeful. As long as we don’t fall into the trap of waiting for more stable times to make big moves (which would further exacerbate any effects all the tariffs on our exports are having) we have a chance of building a better, more sovereign Canada that suits our needs and values without capitulating to other jurisdictions.