Canada is entering one of the most challenging and transformative economic periods in decades. At the Toronto Real Estate Forum this week, four voices — economist Benjamin Tal of CIBC, Paul Morassutti of CBRE, former Quebec Premier Jean Charest, and Richard Lyall of RESCON — offered a sobering but ultimately hopeful assessment of where we stand.
The message was clear: global forces are shifting faster than our policies, and the next two years will test Canada’s resilience, leadership, and strategic clarity.
Benjamin Tal painted a stark picture of the U.S. economy and its ripple effects on Canada. Tariffs, he argued, are here to stay, functioning as hidden taxes on consumers and businesses while fueling structural inflation. China, meanwhile, holds the stronger hand in a prolonged trade war — a reminder that supply chains are far more fragile than political slogans suggest.
Tal noted that 70 percent of U.S. GDP growth this year comes from investment in software, AI, and intellectual property. Without that surge, the U.S. would already be in recession. Yet employment is weakening, youth unemployment sits at 15 percent, and the trajectory of a first job remains critical to lifetime income.
Closer to home, Tal warned of a looming “mortgage shock” in 2026 when renewals hit, compounded by affordability gaps that have forced more than 20 percent of Canadians to double up in housing. His conclusion: 2026 will be tough, but 2027 could be much brighter — if we prepare now.
Paul Morassutti described an economy increasingly dominated by artificial intelligence. Seven companies now dominate global markets, and an “AI arms race” in capital expenditures is underway. The exuberance may look like a bubble, but bubbles can run for years.
Yet Canada’s structural housing crisis is the Achilles’ heel. We are building fewer homes than we need, fewer than we once did, and the shift toward purpose‑built rental is permanent. Retirement living is growing as Canada ages faster than the U.S. and U.K. Morassutti reminded us not to be distracted by U.S. political narratives: global capital still cares deeply about ESG, and Canada has an advantage here.
Jean Charest offered the most geopolitical perspective. “In twenty years,” he said, “we will thank Donald Trump for everything he forced us to confront.”
Canada is the most trade‑dependent country in the world, and our alignment with the U.S. is unavoidable. The renegotiation of CUSMA will be our most important national priority, shaping steel, aluminium, autos, and cross‑border supply chains. Protecting the agreement must be Canada’s number one objective.
Charest warned of deficits spiralling in the U.S., weak productivity at home, and chronic underinvestment in defence. Immigration, he argued, must rhyme with integration — otherwise housing, health care, and schools will strain under the pressure. His conclusion was blunt: Canada is a great country, but we could lose it if we fail to act.
Richard Lyall did not mince words. Construction productivity is abysmal, governments have layered taxes and fees on housing “like we tax alcohol and cigarettes,” and affordability has collapsed. Thirty‑five‑year‑olds living in their parents’ basements is now normal.
Tariffs and geopolitics matter, Lyall said, but the real crisis is internal. We created this affordability disaster, and we can fix it—if we choose to.
Across all four speakers, one theme was unmistakable: we are living through extraordinary times. AI is transforming economies. Superpowers are competing for dominance. Trade alliances are shifting. Housing affordability is collapsing. Debt is rising. Political volatility is reshaping long‑standing assumptions.
And yet, as Charest reminded us, global trade has lifted billions out of poverty, lifespans are longer, technology is advancing at unprecedented speed, and Canada remains one of the most privileged countries on earth. But privilege can be lost.
Canada must respond with strategic clarity, fiscal discipline, immigration integration, housing reform, defence investment, smarter trade strategy, and leadership capable of navigating the next decade of disruption.
The message from Tal, Morassutti, Charest, and Lyall is clear: the next two years will be difficult — but if we act decisively, 2027 and beyond can be profoundly better.
Tune in to Brian Crombie, host of The Brian Crombie Hour, at www.briancrombie.com or on all major podcast platforms.
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