Two of Canada’s largest banks say interest rates could fall faster and ultimately end up lower than previously predicted, as the consequences of a trade war with the U.S. are set to ripple through the Canadian economy.

U.S. President Donald Trump’s executive order imposing a 25 per cent tariff on most Canadian imports, with a carveout for energy products that will be taxed at 10 per cent, came into effect as of 12:01 EST Tuesday.

It triggered chaos in global financial markets and caused Bank of Montreal to revise its economic and interest rate forecast, saying it expects at least twice as many interest rate cuts from the Bank of Canada this year compared to previous estimates.

“We now look for the quarter-point pace to continue in each of the next four meetings until July, taking the rate to two per cent,” wrote Douglas Porter, the bank’s chief economist and managing director of economics, in a BMO Economics note published Tuesday.

“The net risk is that we eventually go even lower, if the (Bank of Canada) is comfortable with the prevailing inflation backdrop later this year.”

The grand expansion of Hamilton’s John C. Munro airport is underway, with operators TradePort International announcing plans this month for upgrades and enhancements of the terminal facilities, as well as introducing daily flight from new partner, Porter Airlines.

The City of Hamilton and TradePort International signed off on a $400 million, 49-year agreement in September to develop and expand the airport over the next 50 years, a deal that has already started to pay dividends.

Upgrades happening include a terminal interior spruce up from check-in to baggage claim and enhancements to the exterior frontage.

Future improvements will better connect the terminal to the planes with new passenger bridges, as well as other infrastructure enhancements.

TORONTO — Some developers say looming U.S. tariffs on Canadian steel and aluminum could be detrimental to the housing sector due to higher costs of key construction materials.

The Ontario Home Builders’ Association, which represents more than 4,000 companies offering services such as development and renovation, said the tariffs could prompt an economic slowdown and lead to decreased investment in residential real estate.

The group’s CEO Scott Andison warned that could be “a brutal blow to the housing sector and therefore to housing affordability.”

“When you throw something as dramatic as trade tariffs into an environment that’s already suffering from low margins, high interest rates and high input costs, the potential for costs … going up makes builders quite nervous,” he said in an interview

“This is just something that puts the development market into a bit of chaos.”

U.S. President Donald Trump signed an executive order on Monday to levy 25 per cent tariffs on steel and aluminum imports to his country beginning March 12 — a move that Canadian Chamber of Commerce chief executive Candace Laing called “wrong on so many levels.”

Uncertainty around tariffs and a potential trade war with the United States were the likely culprits behind home sales falling off during the last week of January, according to the Canadian Real Estate Association (CREA). That weakness pushed national sales down 3.3 per cent compared to December, CREA said in its latest housing report.

At the same time, newly listed properties jumped 11 per cent month-over-month in January — uncommon for the typically slow winter season — reflecting “the largest seasonally adjusted monthly increase in new supply on record going back to the late 1980s,” the report said, aside from swings during the COVID-19 pandemic.

TORONTO — Average asking rents across Canada hit an 18-month low in January, declining 4.4 per cent on an annual basis to $2,100.

A monthly report by Rentals.ca and Urbanation, which analyzes listings in the former’s network, says it marks the fourth straight month of annual rent declines after 38 consecutive increases.

The report says that despite those declines, average rents in Canada are still 5.2 per cent higher than two years earlier and 16.4 per cent higher than three years ago.

Urbanation president Shaun Hildebrand says more rent declines are likely in the months ahead because of heightened economic risks, Canada’s immigration target cuts, and multi-decade highs for apartment completions.

The report says much of the latest decline was concentrated in the secondary rental market, where asking rents for condominium apartments fell 6.5 per cent to an average of $2,219, while rents for houses and townhomes declined 8.9 per cent to $2,144.

Greater Toronto real estate’s bad year ended even worse. Altus Group data showed Greater Toronto Area (GTA) developers saw demand slip further in December, as new home buyer incentives failed to stimulate new demand. As a result, the market accumulated the most year-end inventory in nearly a decade—nearly 2.5x the amount available in 2021’s tight market, but that isn’t the banger. Last year the market saw the fewest new home sales since 1990, when Toronto’s last real estate bubble popped.

Greater Toronto developers wrapped up the year with the worst sales in decades. Just 9,816 new homes sold in 2024, down 47.3% from the previous year and 69% below the 10-year average. Sales haven’t been this weak since 1990, a year which previously marked the start of an extended downturn for the region.

Emerging Trends in Real Estate is an annual real estate report published jointly by PwC (Price, Waterhouse and Cooper) and the Urban Land Insitute (ULI).

The report is compiled by inviting real estate watchers and investors from more than 150 countries, including 63 respondents from Canada, to participate in a survey and interviews to identify the trends and forecasts in real estate, including investment and development trends, real estate finance and capital markets, in North America.

Based on responses, the new report, Emerging Trends in Real Estate 2025, shines a light on the City of Calgary as being a rising star in the real estate investment universe.

Uncertainty surrounding Canada’s trade relationship with the United States is expected to cloud economic decision making by businesses and households for months, economists are warning, with the outcome of a looming review of the Canada-U.S.-Mexico Agreement (CUSMA) trade deal one of many unknowns.

Though Canada secured a 30-day reprieve from immediate U.S. tariffs on Monday, Bank of Nova Scotia economist Derek Holt is among those who aren’t ready to breathe a sigh of relief.

Holt noted the language used by U.S. President Donald Trump, who said it was his intention to see whether “a final economic deal with Canada can be structured” while tariffs are paused.

Traders of Canadian short-term interest rates have begun to price in meaningful odds of an emergency cut by the Bank of Canada to blunt the economic impact of tariffs the United States said will take effect Tuesday.

While a one-month reprieve for Mexico from U.S. tariffs on Monday led to a partial reversal in anticipation Canada also may avoid them, interest-rate swaps linked to the Canadian overnight repo rate average, or CORRA, sustained steep declines. At the same time, Canada’s two-year yield plummeted, reaching levels nearly 180 basis points lower than its U.S. counterpart, the widest margin since 1997.