Recession looming? B.C. experts weigh in days before tariff deadline

On the heels of the premier saying the fallout from Trump tariffs could rival the 2008 financial crisis, CTV News asks experts if a recession is looming.

The threat of the United States imposing a 25 per cent tariff on Canadian goods on Saturday has British Columbians worried about a possible recession.

Simon Fraser University economics professor emeritus Lindsay Meredith believes the tariffs would have a significant impact on the Canadian economy, but may not plunge the country into a recession.

“The 25-per-cent tariff would not put Canada into a full-blown recession. That would be really hyperbole,” said Meredith.

“Tariffs would hurt us, no question. Would they sink the Canadian ship? No.”

Meredith questions if President Donald Trump’s administration will impose tariffs, or if this is a negotiating tactic. The economist notes that during Trump’s first term, he threatened similar policies.

If tariffs are placed on Canada, the country’s central bank has started looking at the different scenarios and the consequences of a trade war with the United States.

One model presented in the Bank of Canada’s monetary policy review shows a scenario where 25-per-cent tariffs applied by both Canada and the U.S. would result in a 2.5 per cent drop in GDP in this country in the first year and a 1.5 per cent drop in GDP in the second year.

The fear of the tariffs and the uncertain future for many British Columbians may also being stalling the real estate industry in the province.

The BC Real Estate Association (BCREA) told CTV News that sales are down 20 per cent in January compared to a 10-year average.

“I think there’s certainly more and more uncertainty amongst potential buyers about, maybe they need to wait and see what happens with this tariff situation before getting back in,” said Brendon Ogmundson, the chief economist for BCREA.

Tom Davidoff, an expert in real estate at UBC’s Sauder School of Business, explained that Wednesday’s interest rate drop to 3 per cent could be the start of what’s to come to help Canadians financially.

He explained that the central bank could make emergency rate cuts to help offset a weak economy.

With files from CTV News Channel’s Mike Le Couteur