Canada’s economy suffered a significant contraction in Q2 2025, shrinking at an annualized rate of 1.6%. This marks the largest decline since the COVID-19 pandemic and is largely attributed to export losses fueled by trade tensions. The impact on businesses has been stark, leading to weaker business sentiment and decreased spending on machinery and equipment. Statistics Canada released the official GDP figures, which were followed by a close watch from the Bank of Canada as they prepare for their September rate decision. 27% decrease in exports at an annualized rate weighed heavily on the economy. The situation has also spurred volatility in global risk assets, particularly Canadian equities, and raised concerns about the potential impact on crypto markets.