In an interview with BNN Bloomberg on Wednesday, Poloz, now a special advisor at Osler, said that ongoing trade tensions with the U.S. have led to a cautious investment climate in Canada. Businesses, he noted, are hesitant to invest amid uncertainty, exacerbating an already weak economic backdrop.

“We’ve been in a weak spot for pretty well two years now,” Poloz said. “It’s been masked by high immigration flows, which kind of buries the data.”

With household spending declining on a per capita basis, mortgage renewals looming, and investment levels remaining low, Poloz painted a bleak picture of Canada’s economic prospects.

He likened the current environment to Donald Trump’s first term as U.S. president, when uncertainty drove Canadian investment south of the border in search of more favourable business conditions.

The contrast between Canada’s sluggish investment and the economic momentum in the U.S. is stark, Poloz noted. He attributed much of the U.S.’s economic strength to tax incentives implemented under President Joe Biden, which have spurred business investment and boosted productivity.

“They have an actual investment boom going there, supporting growth,” Poloz explained. “That’s why their deficit’s big, it’s not giving money away, it’s getting companies to invest more.”

By comparison, Canada has taken a wait-and-see approach, further dissuading businesses from making long-term investment commitments. Poloz also suggested that government fiscal policy has been too focused on household support and not enough on stimulating business investment.

The former Bank of Canada governor pointed out that before the pandemic, Canada was in a much stronger economic position than is the case now.

“Unemployment was at a 40-year low, and inflation was right on target; a very healthy economy by contrast, and we absorbed or were quite resilient to that shock at that time,” he said. “I fear that we would be less so, a lot less so, this time around.”

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Last modified: February 6, 2025