Canada’s economy will face a more pronounced slowdown this year than first thought, but it will still be historically “mild and short-lived” compared to previous recessions, according to the latest forecasts from Deloitte.

The firm expects current labour shortages will incentivize businesses to keep hold of the talent they have through what’s expected to be a relatively short downturn. Deloitte sees unemployment rising to 6.0 per cent in 2023 with most jobs lost in interest rate-sensitive sectors such as construction and transportation, as well as retail trade and information and culture sectors.

Deloitte pointed to the Bank of Canada raising its benchmark interest rate more than expected as driving the more pronounced recession. Other central banks around the world have also been ratcheting up their respective rates, which Stratton said is expected to lead to a global “cooldown” that could see knock-on effects for Canada.

Click here to learn more.