OTTAWA — A recent report from the International Monetary Fund indicates that the Canadian economy has shown greater resilience than anticipated in response to U.S. tariffs. The report notes that while the trade dispute has had negative effects, certain exemptions under the North American free trade agreement have helped mitigate the impact.

Despite this resilience, the report highlights that employment and investment levels have still experienced a decline. Factors such as lower commodity prices, reduced external demand, a slowdown in immigration, and ongoing tariff uncertainties have contributed to these challenges.

Looking forward, the IMF suggests that the economic outlook, while still risky, has become more balanced compared to earlier assessments this year. However, it warns that uncertainty is likely to persist.

The report is part of the IMF’s routine evaluation of the Canadian economy. It emphasizes that the federal government’s budget should focus on increasing public investment. At the same time, it stresses the importance of maintaining a clear debt-to-GDP anchor within Canada’s fiscal framework. The IMF advocates for a fiscal policy that is measured, counter-cyclical, and adaptable to changing economic conditions.