It’s been a wild week in the markets, so let’s break it down—especially with these new tariffs and what they might mean for us.

Jobs: Slowing Down, But Not Falling Apart

Canada’s job market took a bit of a hit in February, adding only 1,000 new jobs when economists were expecting 20,000. That’s a big slowdown compared to the 76,000 jobs we saw in January. Unemployment held steady at 6.6%, which isn’t a disaster, but it’s clear that hiring is cooling off. One bright spot? Wages are up 3.7% year-over-year, meaning workers are seeing some income growth—but not at a pace that will shake things up too much.

In the U.S., job numbers came in at 151,000 new positions, which is decent but still below expectations. Their unemployment rate inched up to 4.1%, and wages climbed 4.1% over the past year. Inflation is still a major concern there, especially with the tariff situation now in play.

Tariffs: The Trade War We Didn’t Order

Just when things were starting to stabilize, the U.S. decided to hit Canada with a 25% tariff on most of our goods and a 10% tax on oil, electricity, and natural gas. In response, Canada fired back with our own 25% tariffs on $30 billion worth of U.S. products—and we’re ready to ramp that up to $125 billion if necessary. Mexico is also preparing to jump in with retaliatory measures.

This tit-for-tat trade war could have some serious consequences. Prices are almost guaranteed to rise as businesses pass these extra costs onto consumers. A slowdown in trade could also mean job losses in certain industries, and the Canadian dollar is already feeling the impact—it’s sinking fast, making imports even more expensive. If this drags on, we could see less investment in Canada, higher unemployment, and an overall cooling of economic activity.

What This Means for Mortgages & Rates

Right now, the Bank of Canada is still cut rates by 0.25% this morning. But if these tariffs push inflation higher, it could slow down any further rate cuts later in the year. The BoC is caught between wanting to support a weakening economy and needing to control inflation. If things spiral, they might have to hold off on aggressive cuts, or worse, reconsider them altogether.

For the mortgage market, this means some uncertainty. If the economy weakens too much, we could see a slowdown in home sales. But if rate cuts keep coming, buyers might feel encouraged to jump in before things change again. Lenders will be watching closely, and we could see some tightening on lending policies if they start feeling uneasy about risk. Spreads could also increase, meaning fixed rates might not drop as much as clients are hoping.

And in More Important News…

While all of this is unfolding, Canada is proving once again that we handle stress like pros. Moosehead Breweries has released a 1,461-beer “Presidential Pack”—one beer for every day of Trump’s current term. If nothing else, at least we have a solid survival strategy.

The Big Picture

The next few months are going to be a balancing act. If the economy weakens too much, rate cuts will come to the rescue. But if tariffs keep pushing prices up, the Bank of Canada might be forced to slow things down. Either way, our job is to help clients navigate the noise and make informed decisions.  It’s going to be an interesting ride!

Leanne Funston 

The Place To Mortgage - Mortgage Alliance 

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