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Quebec Among Canada's Provinces Most Vulnerable to US Trade Risks, National Bank Says

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Quebec's economy is expected to remain under pressure as trade tensions weigh on activity, with uncertainty over the US-Mexico-Canada Agreement remaining elevated, National Bank of Canada said in a Tuesday note.

The latest US tariff threats add to downside risks for the province, it added.

While the US measures are seen largely as a negotiating tactic in USMCA renegotiations, Quebec remains especially vulnerable and is expected to be among the hardest-hit provinces in Canada, wrote National Bank Senior Economist Alexandra Ducharme in the note.

A weaker demographic outlook and higher energy costs are likely to weigh on household finances and growth, though a resilient labor market should provide some support, Ducharme added.

Earlier data highlight Quebec's relative underperformance, said the bank. The province's economy grew just 0.1% monthly in April, compared with 0.5% nationally, extending a divergence that has widened since trade tensions intensified.

Since the start of 2025, which coincides with when US President Donald Trump retook office, Quebec's economy contracted 0.5%, while Canada's expanded 1.0%.

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