The last week of July and the August 1 long weekend saw lots of business news. Partly driven by U.S. President Donald Trump’s self-imposed August 1 Canada-U.S. tariff deadline, by Mark Carney’s weekend trip to B.C., and follow up to Bank of Canada’s rate announcement, there was a lot to digest.

The most expected was BOC’s Tiff Macklem’s announcement that the 2.75 interest rate would hold as is. “Some resilience” said Macklem, describing Canada’s economy with tariffs in place. Marc Ercolao , Economist at TD, said it is “a bit of a surprise” that Canada’s economy is holding as firm as it is against the pressures of U.S. tariffs. “We are avoiding the worst-case scenario,” he said. For now.

Prime Minister Mark Carney spent his long weekend in B.C., visiting first Nanaimo’s Canadian Forces Maritime Experimental and Test Ranges (CFMETR) operations centre on the Winchelsea Islands near Nanoose Bay, then Gorman Group lumber in West Kelowna August 5, where he announced a comprehensive industrial strategy for the industry. That strategy includes:

  • Provide up to $700 million in loan guarantees to address the immediate pressures facing the softwood lumber sector.
  • Invest $500 million to supercharge product and market diversification to make the industry more competitive for the long-term.
  • Build Canadian by prioritizing Canadian materials in construction and changing federal procurement processes to require companies contracting with the federal government to source Canadian lumber.
  • Diversify international markets for Canada’s sustainably sourced forest products. 
  • Provide $50 million for upskilling, reskilling, and income supports for more than 6,000 affected softwood lumber workers through the Labour Market Development Agreements.

For more information, see the Government of Canada website, https://www.pm.gc.ca/en/news/news-releases/2025/08/05/prime-minister-carney-announces-new-measures-transform-canadas

What are tariffs doing to the economy?

Stats Can reports came out July 31, and showed slight economic rebound in June, allowing flat growth in the second quarter. Government programs supporting tariff-affected workers and planned acceleration of defence and infrastructure spending are helping.

Macklem said he expects the economy to keep growing even with tariffs – “but it’ll be on a permanently lower path. Unfortunately, the sad reality,” said Macklem, “Is that tariffs mean the economy is going to work less efficiently.”

What’s going on in the U.S. regarding employment?

U.S. Labor Department reported on August 1 that 73,000 new jobs were added in July, well under the forecasted 115,000.

Scott Anderson, Chief U.S. economist at BMO Capital Markets said “A notable deterioration in U.S. labour market conditions appears to be underway. Daniel Zhao, Chief Economist at Glassdoor says, “The slowdown [in jobs] isn’t just approaching – it’s here.”

The Dow dropped 600 points on the news on Friday.

Price hikes due to tariffs have now been announced by Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel, Temu, Stanley Black & Decker.

In American manufacturing, factories cut 11,000 jobs in July (after cutting 15,000 in June, and 11,000 in May). The job cuts may mean a rate cut by the Fed in September.

What about a trade agreement between Canada and the U.S.?

“No trade deal with U.S. is better than a bad one,” say Canadian business groups. Candace Laing, President & CEO of the Canadian Chamber of Commerce adds, “A little more time now can deliver lasting benefits for an integrated North American economy – and that’s well worth the wait.”

Read Laing’s full statement here: https://chamber.ca/news/statement-on-the-35-trump-tariff-threats/

Does Canada have any leverage with the U.S.?

Unifor President Lana Payne says yes. “This is an extortion game that’s being played by the president of the United States,” she said. Unifor represents over 315,000 workers.

Leverage? Aluminum, critical minerals, electricity, potash, oil – “We have to fight back,” says Payne.

Meanwhile, there was some local B.C. news of note

First, on Vancouver Island, there is increasingly noisy pushback on Island Health and the province’s claim that crime is down – it’s a top news story in both Nanaimo and Victoria, with ramifications for other cities experiencing street crime across the province. Neither Island Health nor the province agree with the mayoral assessments.

Second, the BC Chamber of Commerce commented on a Supreme Court decision July 31. https://bcchamber.org/news/bc-chamber-commerce-statement-supreme-court-canadas-decision The Chamber says “The case will provide businesses greater certainty and predictability about where legal disputes will be resolved. This judgement will be particularly impactful for British Columbian businesses that are involved in international commerce.”