An economist from the Business Development Bank of Canada (BDC) has expressed confidence that Canada is unlikely to face a recession this year, despite current forecasts pointing toward limited economic growth. Pierre Cléroux, BDC’s Vice-President of Research and Chief Economist, shared his insights during a luncheon organized by the Windsor Essex Chamber of Commerce. Addressing local business leaders, he provided a sobering yet cautiously optimistic economic outlook for both the nation and the Windsor-Essex region.
According to Cléroux, the Canadian economy is expected to experience a slowdown throughout 2025, and the Windsor-Essex region might be particularly affected, potentially witnessing near-zero economic growth. Several factors, including the threat of tariffs that could impact manufacturing and cross-border trade, influence this sluggish trajectory, he explained. The extent of economic impact, he emphasized, will largely depend on the number and nature of tariffs implemented. If tariffs on auto parts and related goods are avoided, the region could steer clear of a recession.
To counter the anticipated economic stagnation, Cléroux stressed the importance of proactive strategies that promote long-term economic stability. He highlighted four key areas Canada must focus on: reducing inter-provincial trade barriers, increasing economic diversification, supporting local businesses, and encouraging entrepreneurship. By addressing these areas, he believes Canada can foster sustainable growth and shield itself from external economic shocks.
One of the critical points Cléroux raised was the reliance on imported goods, particularly from the United States. He argued that Canadian consumers and businesses alike should focus more on sourcing domestic products. Replacing even a portion of imports with locally produced alternatives would significantly benefit the Canadian economy by keeping more capital circulating within the country. Supporting Canadian-made goods would not only strengthen local industries but also contribute to job creation and greater self-reliance.
Cléroux acknowledged the importance of the U.S. as a trading partner and emphasized that economic diversification does not mean abandoning traditional alliances. Instead, he proposed that Canada expand its reach by exploring new markets both within the country and internationally. This approach would allow for a more resilient and dynamic economy while still maintaining strong economic ties with the United States. In his view, diversification and partnership can coexist without conflict.
Meanwhile, Eric Larson, president of the Downtown Detroit Partnership, who also attended the chamber event, offered a more emotional perspective on the evolving trade dynamics between Canada and the U.S. He expressed disappointment at the growing sentiment that seems to distance the two long-time allies. For Larson, the conversation around moving away from existing partnerships was disheartening, especially given the historic friendship and collaboration between the two nations. He lamented the timing, pointing out that both countries have significant opportunities for mutual economic benefit, and it’s unfortunate to be facing division at such a crucial time.
Despite the differing perspectives, the event highlighted a shared concern for the economic future of North America. Cléroux remained firm in his belief that Canada can strike a balance between fostering domestic growth and preserving its valuable international relationships. He reiterated that seeking new economic opportunities should not be interpreted as abandoning existing ones, but rather as a necessary evolution in today’s global economy.
The event served as a platform for business leaders to reflect on the current economic environment and explore pathways toward resilience. With careful planning and a commitment to innovation and collaboration, both Canada and regions like Windsor-Essex can navigate the challenges ahead while continuing to thrive in a rapidly changing global landscape.
