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Are Canadians facing temporary economic discomfort, or is the country falling into a full-on recession? Economists are divided on the topic, with some seeing risks of a downturn in the second half of 2025, while others are uncertain and waiting for news on tariffs. 

Last month, the Royal Bank shared its , stating, “RBC Economics isn’t currently calling for a technical recession, but suggests it could still feel very much like one—essentially no growth for the remainder of this year and more job losses.” 

The rising costs of essential goods are becoming hot topics on both Bay and Main Streets. Crypto followers tracking these trends realize that inflation and trade shocks could fuel market volatility in digital assets like Bitcoin (BTC). Some good news came from the Toronto-Dominion bank, which that the core inflation rate eased month over month.

The Bank of Canada (BoC) recently chose to hold its overnight rate steady at 2.75%, still watching the fallout from President Trump’s tariffs. BoC officials suggested, “monetary policy cannot solve trade uncertainty,” doubling down on their. Despite global trade tensions, the nation’s financial system remains robust, even though clear risks loom.

Do Tariffs Cause Inflation in Canada?

The “erratic and unpredictable” U.S. tariffs could spell trouble for the economy, warns BoC Governor Tiff Macklem. Sustained increases might hurt exports and slow growth as they hit industries like manufacturing. Higher costs for businesses are often passed on to consumers. A recent BoC report that trade policy uncertainty is stalling job market recovery, with hiring plans on hold in some sectors.

Tariffs can drive inflation by making imported goods more expensive, potentially pushing prices beyond the BoC’s 1%–3% comfort zone. The severity of any changes to the rate of inflation depends on how long tariffs last and whether the BoC responds effectively, as the models they have developed show varied outcomes.

U.S.-UK Trade Deal and What It Means for Crypto Investors

Last week, the White House shared a statement on its website after President Trump spoke with the United Kingdom's Prime Minister Keir Starmer. The country that progress had been made towards a new trade agreement. This arrangement is reportedly aimed at expanding market access and strengthening economic cooperation.

While the deal has not been completed, the financial markets are known to appreciate stability, meaning it could be viewed as a step towards greater certainty. This matters to blockchain investors because Bitcoin has historically shown price movement around major trade events, although outcomes remain unpredictable.

Signs of a Recession in Canada: Key Indicators Crypto Users Track

A recession typically arrives with rising unemployment and shrinking economic output. Crypto investors, aware of the high risks and volatility, need to look out for signs. report found that “employment declined in Ontario and Nova Scotia, while it rose in Quebec, Alberta, Manitoba, Newfoundland and Labrador.” 

Retail sales are an important consumer confidence clue that investors and economists look to as an indicator of the country’s health. Prime Minister Mark Carney's decision to end Canada’s federal consumer carbon tax, on April 1, has already helped lower prices at the pump. 

Canada’s oldest company, Hudson’s Bay, founded in 1670, is now in the process of liquidation. Known to many for its holiday window displays, the Bay has been a long part of our nation’s history. The company cited high operating costs and challenges in its inability to chart a successful course in a changing retail environment as reasons for its closure. It was the last big department store standing after seeing long-time competitor Eaton’s close its doors back in 1999.

Housing remains a major concern for the BoC and Canadian families. After years of soaring prices, many homeowners face mortgage renewals at higher rates in 2025 or 2026, with the BoC warning of financial strain as a Canada’s economic growth is cooling, driven by global trade tensions and domestic challenges.

Key Economic Signals for Canadian Crypto Users

With so much trade uncertainty, it's possible that economic conditions may continue to shift. Here are some key indicators to watch:

Inflation and CPI: Canada’s Consumer* Price Index (CPI) tracks price changes for essentials. Tariff-driven inflation has been a recent cause for particular concern. Some market observers have historically turned to Bitcoin during inflationary periods, viewing it as a decentralized alternative to fiat currencies.

Interest Rates: The BoC’s next rate announcement is. Higher rates can pressure crypto prices by strengthening the loonie and reducing risk appetite, while lower rates often BTC and digital asset demand. Both Traditional (TradFi) and decentralized (DeFi) markets closely watch these eight annual updates.

Crypto Regulations: Canada’s securities regulators are tightening rules on crypto trading platforms, which could limit trading access but boost legitimacy for assets like BTC. The BoC’s research into a central bank digital currency (CBDC) could transform digital wallets and streamline international payments, potentially challenging the role of decentralized cryptocurrencies.

Ongoing U.S. Tariff Talks and Their Potential Impact on Canada

While Canada is not officially in a recession, the numbers don’t lie. Tariffs remain the major area of concern, not only at home but on the world stage. Progress with both China and the United Kingdom could be a promising sign to global markets. 

Last week, Prime Minister Mark Carney met with United States President Donald Trump at the White House to discuss each country’s trade priorities. These diplomatic efforts may influence market sentiment in the week ahead and are worth keeping a close eye on.

Monitoring Market Sentiment and Policy Trends

Trade uncertainty could increase interest in decentralized assets like Bitcoin, as the public seeks alternatives to traditional markets and increased diversification. Interest rate decisions, inflation updates, and global trade developments can provide valuable context to financial markets. Although some investors have historically looked to BTC during economic downturns, price responses to macro uncertainty can be inconsistent, and volatility is still a defining characteristic of digital assets.

For more educational content on regulatory updates, economic indicators, and crypto trends in Canada, visit the ������� blog. We post weekly insights to help you stay up to date in a fast-changing financial landscape.