Intelligent Investment
Down, But Not Out
Canada Monthly Market Commentary - November 2025
November 27, 2025 2 Minute Read
Trade tensions with the U.S. may have temporarily stabilized a bit as the U.S. Administration contends with mounting consumer pushback and the ongoing legal dispute over its tariff authority. The 10% tariff rate hike on Canadian goods that was threatened as retaliation for a TV ad last month has fortunately not materialized. Instead, rising grocery prices in the U.S. has led to public outcry and ultimately a rollback of some of the food tariffs. Meanwhile, the U.S. Supreme Court has expressed skepticism over the legality of the U.S. tariffs as proceedings continue, adding another layer of uncertainty over the future of U.S. trade policy. Then in regards to the upcoming CUSMA negotiations, U.S. businesses are petitioning for the preservation of North American free trade as seen in the multitude of public comments to the U.S. open consultation period.
Turning to Canada, the economy is expected to narrowly avoid a technical recession based on advanced estimates for a weak 0.4% annualized GDP growth in Q3 2025. As economic indicators signal slowing but positive momentum, the Bank of Canada is expected to hold the policy interest rate in December. In fact, the current consensus from the major Canadian bank economist groups is that the Bank of Canada will hold interest rates at 2.25% through to the end of 2026.
With trade headwinds easing, at least in the interim, and a generally more predictable path forward on interest rates, investor confidence is improving and driving renewed momentum in commercial real estate investment. This has led to the announcement of several major transactions alongside a couple pending merger & acquisition deals that sets up Canada for a rather solid year of total investment volumes.
Economic Highlights:
- Employment rose by 66,600 jobs in October 2025 and the unemployment rate falls to 6.9%.
- Headline inflation eased to 2.2% in October 2025 and core measure CPI-Median and CPI-Trim decreased slightly to 2.9% and 3.0%, respectively.
- Retail sales decreased 0.7% in September 2025 for a total quarterly increase of 0.2% in Q3 2025.
Viewpoints:
- Trump cuts tariffs on beef, coffee and other foods as inflation concerns mount
- U.S. Supreme Court questions legality of Trump’s tariffs
- From airlines to winemakers, U.S. businesses push Trump to preserve North American free trade
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