Canada may be heading into a recession. According to TD Bank’s latest economic forecast, the country is expected to face two consecutive quarters of negative GDP growth, accompanied by rising unemployment and declining home prices — particularly in Ontario and British Columbia.
Chief Economist Beata Caranci has downgraded Canada’s 2025 real GDP growth projection to 0.8%, down from 1.3%, citing private sector job cuts, weak consumer sentiment, and a stagnant housing market as key drivers.
“These are not great numbers,” Caranci told The Globe and Mail, warning of a deeper economic contraction than previously expected.
Key Economic Highlights from TD’s Forecast:
- Recession Alert: Real GDP is forecast to decline in both Q2 and Q3 of 2025.
- Job Losses Ahead: Canada could see up to 100,000 job losses by the third quarter.
- Unemployment Rising: National unemployment is projected to climb to 7.2–7.3%, with Ontario already nearing 8%.
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Housing Market Weakness:
- Ontario home prices are expected to drop 6% in 2025.
- BC prices are forecast to fall by 4%, with further downside into 2026.
- Ontario’s condo market could decline 15–20% from its peak.
Despite rate cuts from the Bank of Canada, housing sales remain down 20% since November, indicating that monetary policy is failing to reignite the market.
“Even with 100 basis points of cuts, sales are going in reverse,” said Caranci.
What Does This Mean for Borrowers?
This environment presents new challenges for Canadians trying to secure or renew a mortgage:
- Banks are becoming more cautious with lending
- Stress tests and income verification continue to block approvals
- Borrowers with equity but non-traditional income may be sidelined
In times like this, private lending becomes essential.
How Lendworth Can Help You Navigate a Recession
At Lendworth, we specialize in equity-based private mortgage solutions — offering flexible alternatives when traditional lenders say no. Whether you’re a homeowner, investor, or small business owner, we offer:
✅ First and second mortgages
✅ Refinancing and debt consolidation
✅ Bridge financing and construction loans
✅ Fast approvals – often within 24 hours
✅ Funding in under a week
We serve clients across Ontario with licensed mortgage administration and brokerage services — and we’re ready to support you during economic uncertainty.
What About Rates, Inflation, and the U.S.?
Caranci predicts the Bank of Canada will only issue two more rate cuts, bringing the policy rate down to 2.25%, while noting that confidence — not just credit access — is driving the slowdown.
On the U.S. side, TD forecasts stronger GDP growth of 2% in 2026, fueled by expected tax cuts and deregulation once trade issues are resolved. However, Caranci cautioned that inflation could spike again, with indicators like the Manheim Used Vehicle Index and retailer pricing plans already showing upward momentum.
Trade, Tariffs, and the Canadian Dollar
Canada’s effective tariff rate with the U.S. currently sits at 12%, but could fall to 2.5% by the end of 2026 with a new USMCA agreement. Until then, uncertainty remains — and so does pressure on supply chains and prices.
Despite economic headwinds, the Canadian dollar has remained stable — trading in the low 70-cent range — buoyed by investor optimism surrounding trade developments.
Final Word: Prepare, Don’t Panic
TD’s downgraded forecast paints a cautious picture of Canada’s economic future. But with the right financing strategy, homeowners and investors can still thrive. At Lendworth, we offer the flexible capital you need to adapt, invest, or protect your property in any market.
📞 Call 905-597-1225
📧 Email info@lendworth.ca
🌐 Visit www.lendworth.ca
Private lending made clear, fast, and reliable — even when the economy isn’t.