The economy is projected by the report to contract at an annualized 0.5% in the fourth quarter, weaker than the Bank of Canada’s flat‑growth forecast. Rosenberg argued that two contractions in the past three quarters were sounding clear alarm bells about a recession.
“Inflation in this country is not really an issue. Virtually every underlying inflation measure is comforted within the Bank of Canada’s comfort zone,” Rosenberg said.
In recent months, Deloitte Canada lowered its 2026 GDP forecast to 1.5% from 1.7%, pointing to soft investment, weaker population growth and a still‑uncertain global backdrop.
For housing – and by extension, mortgage volumes – the message is equally stark. “If you look over the past year, residential construction expenditures are flat as a beaver tail,” Rosenberg said, adding that expectations of renewed housing inflation after rate cuts had not materialized.
“Home prices in Canada nationwide have either been flat or negative sequentially for 10 months in a row, and are running negative two per cent year-over-year,” Rosenberg said.