Canada's potential growth rate is projected to drop below 1%, necessitating action to address long-standing structural weaknesses in the economy.

RBC Economics forecasts a recession-like environment, predicting stagnant growth and job losses, particularly affecting the auto sector and regions like Ontario and Quebec.

Investors are likely to back targeted government spending during a recession, provided it is appropriately sized and contributes to economic resilience.

Low- and middle-income Canadians are facing heightened financial strain due to rising prices, reduced savings, and stagnant wages, highlighting the need for targeted federal support.

To effectively address both immediate and long-term economic challenges, fiscal policy is considered a more effective tool than monetary policy.

Although fiscal space for government spending is limited, it can be strategically utilized to mitigate potential tariff shocks and support initiatives that foster economic growth.

Canada is entering a challenging economic period characterized by slow growth under a new federal government.

In the event of significant tariff increases, Canada may need substantial fiscal measures, which could elevate the federal debt-to-GDP ratio to levels reminiscent of the COVID-19 pandemic.

Government investments in housing, defense, and healthcare should focus on enhancing economic growth, despite concerns about potentially crowding out other growth areas.

A shift in focus is necessary between social and business investments to stimulate growth while managing costs amid ongoing social challenges.