Steelworkers work at the ArcelorMittal Dufasco steel mill in Hamilton, Ont., on Wednesday, March 12, 2025. (Photo: Nathan Dent/Canadian News Agency)

Canadian economists are warning of a potential recession as global markets are reeling from the U.S. trade war.

“We’ve been through a bit of this before,” Don Drummond, a former chief economist at TD Bank, told CTV News on Sunday.

He pointed to steady employment growth in February and the loss of 33,000 jobs in March, saying, “I think that’s a sign of weakness that will be more pronounced, particularly in the auto industry.”

Drummond also expressed concern that the global economic slowdown could deepen and lead to widespread job losses in Canada.

“We’ve been lucky the last few years,” he said. “Our unemployment rate has been very low by historical standards, staying below 7 per cent, but in past recessions, it has typically gone above 10 per cent and stayed there for a long time.”

Drummond warned that if a recession were to occur, Ontario could lose up to half a million jobs.

“I don’t think it’s a far-fetched possibility,” he added, noting that the impact south of the U.S. border would also be significant, in part due to the decline in imports.

“It’s going to shut down their manufacturing processes and lead to layoffs,” Drummond said, also pointing to the global economic outlook, citing countries like Vietnam and Australia that face significant tariffs despite not having the same trade imbalance with the United States.

Drummond suggested that these unresolved trade issues could lead to a prolonged recession.

“We don’t see any signs that this is going to be resolved anytime soon,” he said. "This suggests it may continue for some time."

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