Crisis coming: Top economist says Canada is entering a recession that could cost 100,000 people their jobs

TD Bank chief economist Beata Caranci warned that Canada would soon head into a recession that could lead to at least 100,000 people losing their jobs, as per a report. She also pointed out that the country will face negative GDP growth in the second and third quarters, according to the Globe and Mail.

How Bad Could the Job Losses Get in Canada?

During an interview with the Globe and Mail, she said, "We’re very worried that we’re going to be in a formal recession in the second and third quarters and that we can see perhaps another 100,000 jobs lost. We’ve already had over 70,000 lost in the private sector in two months," as quoted in the report.

Can the Federal Government Stop the Job Cuts?

Caranci explained in a statement to Global News about that forecast, that it all depends on how effective the federal government is at implementing promises to “stabilize jobs, particularly in manufacturing,” as per Global News.


She pointed out that “The 100,000 jobs looks like a big number but it amounts to 0.4 per cent of the labour force,” according to Global News.

The economist mentioned that, “Past recessions have corresponded with job losses in a range of one to five per cent of the labour force. This speaks to the belief that there will be a front-loaded adjustment to the tariff environment, but it’ll likely lack severity,” as per the report.

More Jobs at Risk Than Being Created

She also added, “But for now, there’s immediate transparency in jobs at risk of being lost, rather than what can be gained,” according to Global News.

Unemployment Already on the Rise

The latest Statistics Canada data revealed that the unemployment rate continued to increase in April to 6.9%, which represents about 1.5 million people, as per CTV News.

According to Global News, the ongoing trade war with the United States has also been impacting Canada’s labour market, with unemployment increasing because companies are cutting workers.

Canadian Economy Forecast

TD Economics predicted that the first quarter of 2025 is expected to show the economy will grow by 1.8%, while the second quarter is projected to show a fall of 1%, and the third quarter will decline by 0.2%, reported Global News.

FAQs

Is Canada really heading into a recession?
Yes, TD Bank’s chief economist expects negative GDP growth in the second and third quarters of 2025, meeting the standard definition of a recession.

How many jobs could be lost?
At least 100,000 jobs could be at risk, on top of the 70,000 already lost in just two months.