Setting the Stage: A Year of Tension and Transition
At the Harmony Event Centre in Oshawa, business leaders recently gathered for a sobering but enlightening economic update hosted in partnership by TD Bank Group, the City of Oshawa’s Business & Economic Development Services, and TD’s Deputy Chief Economist, Derek Burleton. The presentation tackled the currently tumultuous state of the global and Canadian economies, where uncertainty, not growth, is the defining theme so far in 2025.
But uncertainty doesn’t mean paralysis. For the 200 or so attendees, this session delivered clarity on how to respond, how to prepare, and—perhaps most importantly—where the signals of opportunity might emerge.
READER NOTE: I’m going to refer often to Derek’s presentation deck in this article. The deck is embedded further down below, so you can see the full datasets in their presented contexts.
Confidence Recedes, Volatility Persists
Derek Burleton opened with a reality check: business and consumer confidence across developed economies has slipped to levels historically associated with recession. According to Burleton, “confidence is at recessionary levels across the board—Canada, the U.S., Europe. That’s rare.” Confidence indices across sectors are echoing the same signal: companies are unsure, consumers are cautious.
And it’s no wonder. The market has been riding waves of tariff escalation and abrupt policy pivots. On page 2 of the slide deck, we see a sharp rebound in equity markets, triggered not by optimism but by hopes of trade reprieve following a 90-day pause in U.S. tariffs on China. These kinds of swings are now the norm, not the exception.
Tariffs and Trade: The 10% That Changed Everything
One of Burleton’s most striking observations was the new normal for international tariffs. “Ten percent is the new zero,” he said, referencing a shift in U.S. trade policy that effectively locks in 10% as a baseline tariff rate, with Canada’s current exposure estimated around 12%. Compared to a pre-2025 effective rate of 2%, this change is seismic.
A visual on page 4 underscores this transformation, showing how U.S. tariffs have soared at unprecedented speed—22 percentage points in just two weeks.
Canadian businesses are not immune. While Canada has so far been spared the harshest hits seen in China, the uncertainty alone has been enough to cause many firms—like Honda, which paused a major EV investment—to freeze spending plans.
A Mild Recession with a Path to Recovery?
The forecast for Canada? A shallow recession. Real GDP is expected to contract modestly before rebounding in late 2025 or early 2026. Employment growth has softened. Consumer spending is tapering. Business investment is wavering.
Page 11 of the slides starkly states it: “But Has Got Trumped!” The data shows a noticeable downgrade in projected Canadian GDP following the uptick in tariffs and uncertainty.
However, Burleton emphasized that this isn’t the beginning of a spiral. In fact, multiple factors are working in Canada’s favour:
Government stimulus: Federal and provincial governments are responding with capital investment and tax cuts. Page 16 of the deck notes that stimulus equivalent to 1% of GDP is assumed in current projections.
Interest rate cuts: The Bank of Canada has already reduced rates and is expected to stay ahead of the U.S. Federal Reserve with additional cuts by year’s end (see page 17).
Resilient Canadian dollar: Thanks largely to comparative weakness in the U.S. dollar, the loonie has shown stability that helps contain imported inflation (page 18).
What Business Leaders Should Watch
So how should business operators interpret all of this?
Don’t wait for perfect clarity—plan for probable outcomes: Tariff levels may remain elevated, but the sharpest shocks are likely behind us. Planning for a 10% effective tariff rate as a baseline is prudent.
Expect tight consumer behaviour: With the unemployment rate expected to peak near 7.2% and population growth slowing due to immigration policy shifts (page 13 and 15), discretionary spending will be restrained.
Seize fiscal and monetary policy tailwinds: If your organization has expansion, hiring, or investment goals, the current period of lower interest rates and impending government incentives may be the best moment to act.
What Comes Next: Productivity, AI, and the Long Game
The final portion of Burleton’s presentation ventured into long-range outlooks. He called for a “pivot policy,” which he defines as a coordinated push to reduce Canada’s overdependence on U.S. trade and to boost productivity.
Canada’s productivity remains stubbornly low, hovering around 67% of U.S. output per working hour (page 20). Burleton suggests tackling this through:
Regulatory reform: Excessive red tape remains a barrier to capital investment.
Capital gains incentives: Deferring tax on reinvested capital could stimulate domestic investment.
Interprovincial trade modernization: Provincial trade barriers continue to dampen potential internal efficiencies.
In Burleton’s words: “We need more private investment, better policy, and a coherent national strategy for infrastructure and trade diversification.”
Encouragingly, many of these themes—defence spending, modular housing innovation, and regional economic diversification—are already appearing in federal and provincial platforms.
Bottom Line: Steer Into the Fog with Plan & Purpose
While today’s economic landscape is shrouded in uncertainty, businesses that pay attention to the macro forces and act strategically can still find firm footing.
Key takeaways for Oshawa and Durham Region businesses include:
Assume volatility, but look for stabilization signals—especially around tariffs.
Keep a close eye on capital and expansion incentives tied to fiscal policy.
Explore opportunities to pivot toward sectors prioritized in upcoming infrastructure and trade initiatives.
Leverage the full insights from Derek Burleton’s TD Economic Update slide deck to inform your internal strategy conversations.
We may not be able to predict every turn in the global economy, but after Derek’s session, one thing is clear: inaction is not the safe choice. With informed risk and calculated action, business leaders can still build, grow, and lead confidently into the future.
