Recession fears grow as ex Bank of Canada governor warns Canada faces 30 percent risk

Canada faces a roughly 30 percent chance of entering a recession, a former Bank of Canada governor has warned, as global economic pressures continue to build.

Stephen Poloz told CTV that the Canadian economy is already growing slowly, at around one percent, while dealing with the impact of US tariffs and rising energy prices linked to the conflict in the Middle East.

“It’s not about somehow avoiding all that. Then on top of that, we’ve got this oil shock”, Poloz said.

The war in the region, including disruptions in the Strait of Hormuz, has pushed fuel prices higher and raised fears of a broader energy crisis.

The International Monetary Fund also warned this week that the global economy could come close to a recession if the conflict continues.

Poloz said governments could offer short term relief through measures such as fuel tax changes, but stressed longer term solutions are needed.

“Can we do some offsets? Like, for example, the government changes the tax structure on gasoline. That’s a mitigant, a short-term kind of offset. But really, for the Trump tariffs, what we need is to find replacements, as opposed to offsets.”

He added that Canada’s role as a major oil exporter could soften the impact, though disparities across sectors and regions would remain significant.