The economy isn't tanking, it's time to think about how firms can capture growth.

Let’s be honest—2024 and early 2025 threw a lot at us. Between aggressive U.S. tariffs, interest rate uncertainties, and slowing global demand, many businesses hit pause on hiring and investment, as they should. You don't spend money if you do not trust the near to medium term outlook.

But here’s the thing: Canada’s economy is holding up better than most people think. And the window to prepare for a turnaround is starting to open. Here are the latest development and the key things I think any firm should consider to navigate the next couple of quarters;

Tariff fears are fading.

Earlier this year, US tariffs on everything from steel to autos caused real anxiety. Trade volumes dipped, and Canadian exporters felt the heat. For the sectors impacted, it has been a difficult first half of the year, especially for the auto industry in the Windsor area. But those threats are now easing. Cross-border relations have improved, and while some uncertainty remains, we're no longer in “brace for impact” mode. In fact, Carney and Trump agreed on signing a new trade deal within 30 days, with Trump saying that "not much is in the way of getting it done"...

It had been difficult for companies exporting with good's exports dropping more than 5% between January and March. But we can expect a recovery as trade tensions de-escalate and global demand (hopefully) stabilizes.

The economy isn't crashing.

This isn’t a boom cycle—but it’s also not a recession. The Bank of Canada now expects GDP to grow about 1.7% this year. Not flashy, but enough to keep job creation moving. Inflation has cooled to around 2.7%, giving the Bank room to cut rates—and that’s already breathing life into housing and consumer spending; for instance, home sales rose for the third straight month in May and this is not something that would happen in a collapsing economy. The underlying inflation is still hot, so that's one piece we will need to look for.

Businesses are adapting, not panicking.

According to the Bank of Canada’s latest business outlook, firms aren’t pulling back as sharply as before. Supply chains are healing, and wage pressures are easing. Many are still cautious, but they're starting to plan for growth again—not just survival. As I mentioned during the webinar with my Randstad colleagues two weeks ago, firms basically learn to live with the new normal, and keep being driven by the need for growth.

Having said that, many companies are still sitting on the sidelines, waiting for a green light. But by the time everyone agrees the recovery is real, the competition for talent will be back in full force as we have less immigration, and a whole lot more demand. Just what the infrastructure projects could bring through the acceleration of federal approvals could throw competition for talent to a whole other level.

At the end of the day, those past years have merely seen a normalization. But we did not solve our structural challenges, especially in finance, healthcare and skilled trades.