Richard Maddox

By TD Economics Amid a downgraded national growth profile for 2025, were retaining our view that the Atlantic and Prairie Regions outperform this year. B.C.s economy is also expected to display resilience. In contrast, Ontario and Quebec are poised for much softer growth performances given their relatively high orientation towards manufacturing. Provincial economies across the country benefitted from a sharp rise in exports in Q1 due to tariff-front running, but the near-term trade picture is indeed rocky. Ontario and Quebec will see disproportionate impacts from U.S. tariffs on the steel, aluminum, and automotive sectors. Were also expecting that additional U.S. levies on copper, pharmaceuticals, semiconductors and lumber will be applied. Our assumption of a gradual easing in U.S. tariff rates by year end means that the stage is set for a modest recovery in Canadas industrial heartland in 2026. Commodity based economies are holding up better this year, but growth has still been downgraded relative to March. Expedited OPEC+ output plans and weak global demand have led us to mark down our oil price forecast, accentuated by an unexpectedly strong Canadian dollar. The recent escalation in Middle East tensions pose an upside risk to prices in H2-2025. Canadas labour market continues to cool. Ontario, Quebec, B.C., and Manitoba have been absorbing most of the shock so far this year, as unemployment rates have risen faster than in other regions. Unemployment rates in the Atlantic provinces have broadly stabilized as employment growth and labour force growth have weakened in tandem. Saskatchewans labour market is the clear provincial standout due to its relative strength. With this years provincial budget season wrapping, a few themes have emerged. Provincial revenues and overall fiscal balances are expected to take a hit this year, reflecting U.S. trade tensions, and provinces have introduced measures to buffer their respective economies in the short run. Ramped up capital spending plans also featured heavily. This could lift economic growth, but is also expected to boost already-elevated debt burdens. With some signals that pent-up demand may be returning, were expecting positive growth in home sales in the back half of next year across Canada. Still, a weak economy and uncertainty should keep sales levels subdued. Near-term national home price growth will be restrained by loose supply/demand balances in B.C. and Ontario, although firmer price gains are expected elsewhere, where conditions are considerably tighter. https://economics.td.com/provincial-economic-forecast

The number of home sales recorded over Canadian MLS Systems climbed 3.6% between April and May 2025, marking the first gain in activity since last November. The monthly increase was led by the Greater Toronto Area (GTA), Calgary, and Ottawa. May 2025 not only saw home sales move higher at the national level for the first time in more than six months, but prices at the national level also stopped falling, said Shaun Cathcart, CREAs Senior Economist. Its only one month of data, and one car doesnt make a parade, but there is a sense that maybe the expected turnaround in housing activity this year was just delayed for a few months by the initial tariff chaos and uncertainty. May Highlights: National home sales were up 3.6% month-over-month. Actual (not seasonally adjusted) monthly activity came in 4.3% below May 2024. The number of newly listed properties rose 3.1% on a month-over-month basis. The MLS Home Price Index (HPI) was almost unchanged (-0.2%) month-over-month and was down 3.5% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was down 1.8% on a year-over-year basis. https://stats.crea.ca/en-CA/