Amid escalating global market turmoil and intensifying fallout from the U.S.-China trade war, a prominent Canadian economist is warning that Canada may be on the brink of a recession, with serious implications for jobs and economic growth.
Don Drummond, former Chief Economist at TD Bank, expressed deep concern during an interview with CTV News Channel on Sunday, emphasizing that early signs of economic distress are already emerging across Canada, particularly in key industrial sectors.
“We’ve already had a bit of a taste of this,” Drummond said, referring to flat employment growth in February and the recent loss of 33,000 jobs in March. He pointed to growing weakness in the automotive sector, a pillar of the Canadian manufacturing economy, as a potential trigger for broader economic challenges.
According to Drummond, Ontario could see up to 500,000 jobs lost if a full-scale recession takes hold — a scenario he described as “not far-fetched” given the current trajectory of global economic disruption.
Canada’s unemployment rate has remained historically low in recent years, hovering below 7%, but Drummond warned that could soon change. “In past recessions, it has typically gone above 10% and stayed there for quite some time,” he noted.
The global picture is equally concerning. Countries such as Vietnam and Australia, despite having no major trade imbalances with the United States, are now grappling with new tariff regimes, reflecting the sweeping reach of the current trade conflict. These widespread disruptions, Drummond said, could paralyze global production chains, freeze business investment, and spark a wave of layoffs both at home and abroad.
Drummond added that even U.S. industries are at risk, as the imposition of higher tariffs may backfire by reducing imports critical to American production. “That’s going to freeze their production processes and lead to layoffs as well,” he warned.
With global uncertainty mounting, Drummond believes the economic outlook may worsen before it gets better. “We’re not seeing signals that this can have an early resolution,” he said. “It suggests that it may go on for some time.”
As Canadian policymakers, businesses, and families brace for potential economic turbulence, the call from one of the country’s most respected economic voices is clear: prepare now for a downturn that could reshape Canada’s economic landscape.