A new report from DesRosiers Automotive Consultants provides a small glimpse of what can be expected from the Canadian economy for 2026.
The report says that vehicle sales dropped slightly in January.
DesRosiers warns against reading too much into these figures as this is just one month and they say January is the least reliable month when it comes to predicting the economy.
But they point out that the drop in sales comes with Donald Trump’s political and economic turmoil hanging over Canada.
With the auto industry facing uncertainty in the Canada-U.S. trade war, their figures stack up with other statistics Canadian consumers are facing.
January auto sales were down 2.9 per cent from last January, while at the same time, house prices have dropped: in Hamilton they’re down 6 per cent and in Niagara it’s down 4.6 per cent.
While grocery prices are up 4 to 6 per cent as Canadians pay more for food.
In the case of cars and other big purchases, consumers appear to be holding back.
“What we’ve seen over the past few months is that consumer confidence is declining and that’s starting to hit auto sales here in Canada,” said Colin Mang, a professor of economics at McMaster University. “The longer the trade war has gone on, the more families are uncertain about the future.”
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Mang says the key factor is whether Canada can negotiate a new trade deal with the U.S. by this summer.
“If the trade negotiations go badly, that could prolong the uncertainty here for Canadian manufacturers,” said Mang. “Ultimately if the agreement fails we could be looking at a realignment of the Canadian economy. We could see manufacturing shrink and the economy to move toward a larger base of services.”
Brock University political science professor Stefan Dolgert says these are uncharted waters.
“Because we’re just never sure what the next shoe is going to be to drop, in terms of Trump’s response to us, and especially if things get a little crazy with some kind of U.S. support for separatism in Alberta, that’s really going to heighten the uncertainty,” said Dolgert.
“I’m hoping it’s not going to get much worse than it is, but I think we’re just going to be in this kind of ‘up and down’ period for some time going forward.”
He says the critical thing is to stand up to Trump.
“I think we really have to have a steady hand, but kind of a firm hand in terms of our response back to the U.S.,” said Dolgert. “I don’t think it makes any sense to give in to the bullying, so I think kind-of steeling ourselves — the idea is we’re going to be in for some rough sailing and we have to understand that, and we have to stick together.”
He further says giving in to Trump would just show weakness.
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