One of the major economic news stories of the year for Canada seems set to drag on into 2026: the trade war that has alarmed homebuyers and undermined real estate market forecasts shows no signs of ending.
It has been a year since Donald Trump, then the president-elect of the United States, first promised to impose huge tariffs on Canadian goods — the beginning of a saga that dominated headlines in 2025. A series of tariff delays and exemptions for goods compliant with CUSMA (the Canada-United States-Mexico Agreement) have alleviated the worst fears of financial markets, although they have forced many potential homebuyers to step back due to economic uncertainties.
Ongoing uncertainty and labor market concerns are weighing on housing prospects in Toronto, notes the Toronto Regional Real Estate Board (TRREB), emphasizing the need for positive shifts in trade to revive sales. The prospects for a trade deal remain distant: negotiators have made little progress since Trump severed dialogue over anti-tariff ads from Ontario in the U.S. Prime Minister Mark Carney has stated outright that tariffs, in one form or another, will remain.
Canadians are gradually getting used to a turbulent economy. Uncertainty has kept the housing market in a “wait-and-see” mode this year, said REMAX Canada President Don Kottick. He is disappointed by the lack of a federal agreement with the U.S. and sees no chances for a breakthrough before the end of the year. However, hope lies in Canadians’ adaptation to volatility, which is likely to persist into 2026. A helpful factor: a series of rate cuts by the Bank of Canada (by 275 basis points since June 2024) has made mortgages cheaper. “Canadians have come to terms with uncertainty. The rate cuts have brought some back from the sidelines, but now a pause is expected until Q1–Q2 2026. Buyers are saying, ‘This is the new normal’ — and are starting to test the market.”
In 2026, buyers will have more choices: listings are increasing, prices are falling in expensive cities. A REMAX survey shows that a quarter of Canadians expect prices to drop, and another half-point cut in the Bank of Canada’s rate will push them to buy. However, workers in industries hit by tariffs (like Algoma, which is cutting 40% of its workforce due to Trump) may delay their plans.
In other sectors, things are looking better: November employment and growth data exceeded expectations, noted TRREB head Jason Mercer. The economy is better weathering the trade winds, and infrastructure projects may boost builders’ confidence.
