According to The Conference Board of Canada, GDP is expected to grow just 1.5% this year, a tepid pace that reflects broader challenges both at home and abroad.
Momentum is Slipping
While the Canadian economy started strong in Q1 2025, experts are warning that the surge won’t last. “The momentum is quickly fading,” says Cory Renner, Associate Director of Economic Forecasting. The culprit? Ongoing trade disputes, particularly with the U.S., are casting long shadows over business investment, exports, and consumer confidence.
The Housing Market: A Continuing Chill
For homebuyers and lenders alike, the Canadian housing market continues to feel the pressure:
- Affordability remains poor, especially in major cities like Toronto and Vancouver.
- Consumer debt is high, making borrowers more cautious.
- Population growth is slowing, reducing overall demand.
While federal efforts like the Build Canada Homes initiative aim to inject life into the market, the impact is expected to be modest at best. A quarter-point interest rate cut anticipated later this year may offer some relief, but it won’t be a cure-all.
U.S. Slowdown Spills North
Canada’s largest trading partner is also facing turbulence. After two years of rapid growth, the U.S. economy contracted slightly in Q1 2025—its first pullback since early 2022. Policy uncertainty, rising unemployment, and inflation linked to new trade and immigration rules are driving the slowdown. U.S. growth is forecast at just 1.4% in 2025, rebounding only slightly in 2026.
This directly affects Canadian exporters. While some have pivoted to new markets, it’s not enough to fill the void left by declining U.S. demand. Canadians and local businesses are also pulling back, reducing imports and discretionary spending.
Labour Market Softens, Investment Slows
Canada’s labour market is losing steam, with fragile business confidence stalling hiring plans and nudging up unemployment. The slowdown is compounded by immigration policy shifts and weak productivity growth.
Meanwhile, business investment is expected to lag, particularly in sectors tied to cross-border trade or electric vehicle manufacturing—both currently clouded by policy ambiguity.
What This Means for Borrowers and Investors
At Lendworth, we understand that economic uncertainty can feel paralyzing—but it also opens up opportunities.
- For borrowers, equity-based lending solutions offer flexibility when traditional financing tightens.
- For investors, our focus on low loan-to-value mortgages in strong Ontario markets offers a conservative path to generate stable returns—even in volatile times.
Whether you're navigating a home purchase, seeking refinancing, or looking to invest in secured real estate loans, Lendworth is built to weather economic cycles and help you do the same.
📞 Talk to a Lendworth advisor today to explore smart lending or investment opportunities in a challenging market.
Visit www.lendworth.ca
Your equity. Your opportunity.