Canada lost 68,000 jobs in September, Statistics Canada said Oct. 9, 2026, adding pressure to a Deloitte Canada forecast that cut the country’s 2027 economic growth outlook to 1.6 per cent just 10 days earlier because of escalating U.S. tariffs.
The unemployment rate rose 0.1 percentage points to 6.5 per cent, following a loss of 42,000 jobs in August, according to the federal agency’s Labour Force Survey. Canada News Media has the full breakdown of the September jobs numbers.
Deloitte’s fall economic outlook, Weathering change: Canadian businesses navigate renewed uncertainty, was published Sept. 29 under chief economist Dawn Desjardins. It lowered expected real GDP growth for 2027 by 0.4 percentage points to 1.6 per cent, from two per cent, Global News and the Financial Post reported. Global News described the change as a 20 per cent cut to the growth projection.
The same report raised Deloitte’s forecast for 2026 by 0.2 percentage points to 0.9 per cent, after the economy grew at a 3.3 per cent annualized pace in the second quarter, both outlets reported.
“Canada’s trade outlook has deteriorated following the renewed escalation in trade tensions with the United States,” Desjardins wrote in the report, as quoted by Global News. Deloitte’s own summary said trade uncertainty with the U.S. “continues to weigh on the outlook, but policy support could help offset the impact.” The full report is available as a PDF on Deloitte’s website.
Two of the risks Deloitte flagged were already in motion when the forecast came out. Its numbers accounted for the first wave of 50 per cent U.S. tariffs under Section 338, in effect since Aug. 22, and for Canada’s counter-tariffs that began Sept. 8. They did not include the Sept. 15 changes to the list of goods covered by the Section 338 tariffs, or a U.S. ban on some Canadian imports, including alcohol, dairy products and motorcycles, that took effect the day the report was released. Deloitte called those measures a downside risk to its forecast, Global News reported.
In an interview published Oct. 9 by the National Post, Desjardins, asked about the prospect of further U.S. tariffs, said “it’s the most likely outcome that we would have even slower growth in 2027 than we have in the current forecast.” She described Canadian employers as operating in a “low-hire, low-fire type of environment.”
Exports are the main channel for the damage. Deloitte expects exports to fall 0.9 per cent in the third quarter and five per cent in the fourth quarter, while still ending 2026 up 2.6 per cent on the year, the Financial Post reported. Desjardins told the National Post that motor vehicles, forestry and lumber, and steel and aluminum are the hardest-hit sectors, and that Ontario, Quebec and British Columbia are the most affected provinces.
Business investment is forecast to grow 1.6 per cent this year and 3.5 per cent in 2027. Deloitte said on its outlook page that investment gains are still expected to reach 3.5 per cent in 2027 “despite the absence of further interest-rate relief.”
For borrowers, Deloitte expects the Bank of Canada to hold its policy rate at 2.25 per cent for the rest of 2026, according to both Global News and the Financial Post. Global News reported that the firm expects a gradual series of rate increases to begin in 2027, with as many as four hikes.
The fall outlook is the latest in a series of revisions this year. Deloitte forecast 1.5 per cent growth for 2026 in January, cut that to 1.2 per cent in April as the war involving Iran pushed up energy prices, and lowered it again to 0.7 per cent in its June summer outlook, according to reports at the time by the Globe and Mail, the Financial Post and BNN Bloomberg. The summer outlook had projected a rebound to two per cent growth in 2027, the figure the fall report has now trimmed.
Canada News Media reported the fall outlook on the day it was released.
The next major test comes Oct. 28, when the Bank of Canada is scheduled to announce its next interest rate decision and publish an updated Monetary Policy Report with its own growth and inflation forecasts.
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Via Global News and the Financial Post, with additional reporting from the National Post. Primary sources: Deloitte Canada and Statistics Canada.
