From tech breakthroughs to tariff shocks, here’s how startups, finance, and industry leaders navigated a turbulent week across the US and Canada.
1. US and Canadian Stock Markets Surge Despite Tariff Uncertainty
Both the S&P/TSX Composite and US stock indices posted significant gains, with Canada’s main index up over 200 points in early trading. The Dow Jones and S&P 500 each rose 0.8%, and the Nasdaq gained 0.6%, reflecting investor optimism even as trade tensions lingered.
2. Bank of Canada Pauses Rate Cuts Amid Tariff Concerns
The Bank of Canada held its key interest rate steady at 2.75% on April 16, after 225 basis points of cuts since mid-2024. Policymakers cited extreme uncertainty due to the US-Canada trade conflict, with future rate cuts likely but not guaranteed as economic risks persist.
3. Layoffs Mount as US Tariffs Hit Canadian Manufacturers
A growing number of Canadian companies, including Stellantis, Prepac, and Eascan Automation, announced layoffs and production pauses. Stellantis temporarily halted work at its Windsor, Ontario plant, affecting 3,200 employees, while Prepac and Eascan cited US tariffs as the reason for staff reductions.
4. Small Businesses Face Pressure from Trade Uncertainty
Nearly two-thirds (62%) of small and mid-sized Canadian businesses report negative impacts from ongoing US-Canada trade disputes. Many are delaying investments and reducing hiring, with the Canadian Federation of Independent Business calling for urgent government action.
5. Canada’s Economy Slows but Avoids Recession—For Now
Canada’s GDP grew by 0.4% in January, but the pace has slowed. March saw a loss of 33,000 jobs, mainly in tariff-sensitive sectors like autos and energy. Consumer confidence is down, with nearly half of Canadians planning to cut spending in 2025.
6. US Economic Growth Slows Sharply in 2025
After a robust 2.8% growth in 2024, US GDP growth is expected to slow to 1.3% in 2025. The slowdown is attributed to uncertainty and tariff shocks, raising the risk of recession. Inflation is projected to rise to 4.0% by Q2 2026.
7. Canadian Auto Sector Faces Disruption from Tariffs
Tariffs on vehicles and parts have led to temporary plant closures and layoffs in Canada and the US. Stellantis’ Windsor plant paused production for two weeks, impacting thousands of workers, as companies reassess cross-border supply chains.
8. US Tariff Policy Drives Up Manufacturing Costs
Canadian manufacturers report aluminum costs rising nearly 50% due to new tariffs. This has forced companies like Eascan Automation to lay off staff and delay projects, as clients hesitate to invest amid price volatility.
9. Canadian Government Supports Businesses with New Funding
The Business Development Bank of Canada (BDC) announced $500 million in new financing and advisory services to help companies adapt to tariff uncertainty. The initiative aims to boost business resilience and support growth during turbulent times.
10. Tech Sector Remains Resilient Amid Economic Headwinds
Despite broader economic uncertainty, the tech-heavy Nasdaq Composite rose 0.6% this week, indicating continued investor confidence in technology and innovation-driven companies.
11. Restaurant and Hospitality Sectors Show Surprising Strength
Canadian restaurant bookings in March were 20% higher than a year ago, according to OpenTable. This suggests consumer spending in hospitality remains robust despite tariff-driven uncertainty.
12. Women Entrepreneurs Continue to Make Gains
Over 400,000 women entrepreneurs in Canada have started or grown businesses thanks to the federal Women Entrepreneurship Strategy, highlighting progress in gender equity and innovation.
13. Data Privacy Takes Center Stage in Canada
The Canadian government launched consultations on international data protection and privacy certifications, aiming to facilitate trusted cross-border data flows and strengthen digital business ties.
14. Canadian Retail Sales Show Mixed Signals
While February retail sales dipped 0.4%, preliminary data for March suggests a rebound, with auto sales surging 8% month-over-month as consumers rushed to buy before tariffs took full effect.
15. US and Canadian Startups Face Funding Hurdles
Startups in both countries report increased difficulty securing investment amid market volatility and trade policy uncertainty, prompting calls for more government and private sector support.
16. Economic Policy Uncertainty Clouds Outlook
The Bank of Canada presented two divergent economic outlooks—one predicting stagnation, the other a potential recession depending on the duration and severity of US tariffs.
17. Cross-Border Trade Flows Adjust to New Tariff Regimes
Canada retaliated against US tariffs with 25% duties on $60 billion worth of imports. While the average US tariff rate on Canada is now 3.6%, exemptions for CUSMA-compliant trade offer some relief.
18. Job Vacancies Remain Above 2024 Lows
Despite job losses in March, openings in Canada’s manufacturing sector remain higher than late last year, suggesting some resilience in the labor market even as companies adjust to new realities.
19. Fiscal Policy May Ramp Up if Economy Weakens Further
Experts suggest that Canada has room for additional fiscal stimulus if the economic slowdown deepens, with policymakers closely monitoring the impact of tariffs and consumer sentiment.
20. Investor Sentiment Remains Cautiously Optimistic
Market analysts note that while tariffs and uncertainty have dampened business investment, equity markets are holding up, and the worst-case economic scenarios have so far been avoided.
