Trump 2.0: The First 100 Days | Canada

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Thesis for Expected Rebound in 2026 Canada

Impact on CRE

• While the outlook for 2025 has become more subdued, the stage is being set for a greater growth story in 2026. • The baseline calls for the average effective tariff rate to be notching down, which will allow inflation to decelerate, creating an easier pathway for the Bank of Canada to cut. • Some of the impacts of President Trump’s other priorities will start to materialize more meaningfully — boosting U.S. growth. • This is important for Canada because as the U.S. recovers, there will be spillover benefits despite the ongoing trade tensions. • We assume that, between escalation and USMCA, the effective tariff rate on Canada declines to under 1% by Q4 2026 from 10 15%* in Q2 2025.

Growth Accelerates

Inflation Rolls Over

3.0

2.8

2.5

2.6

2.0

2.4

2.2

1.5

2.0

1.0

1.8

1.6

0.5

1.4

0.0

1.2

-0.5

1.0

• This implies that property demand will accelerate in 2026 at a time when the

construction pipeline has thinned out more than was expected “pre - tariff.” Downward movement in vacancy and upward pressure on rents will begin to form across most property types and markets as a result.

2024Q1

2024Q2

2024Q3

2024Q4

2025Q1

2025Q2

2025Q3

2025Q4

2026Q1

2026Q2

2026Q3

2026Q4