CFIB expects Canada’s recession, with economic contraction in the second and third quarters

A new CFIB report shows that growth is forecast to fall by 0.8% in the second quarter and revenue will rise by 0.8% in the third quarter.

The group said the analysis of the impact of tariffs on supply chains focuses on the long-term disruption that most companies expect.

Simon Gaudreault, chief economist at CFIB, said uncertain trade conditions are affecting business confidence, leading to suspension or cancellation of investments.

Private investment is expected to fall 13% in the second quarter and continue to decline 6.9% in the third quarter.

Despite the expected decline, the CFIB stressed that inflation remains stable, which puts Canadian banks in a better position to consider reducing borrowing costs in the second half of the year.

This report by Canadian Press was first published on July 24, 2025.

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Last modified: July 24, 2025