It was a busy 2024 for Canadian business: the Bank of Canada began cutting interest rates as inflation moderated and labour unions looked to make gains.
Some of these changes look set to continue in 2025, but the new year will also bring fresh challenges.
Here are five things to watch in Canadian business for the coming year:
Canada-U.S. relations
Corporate Canada will be focused on Donald Trump, who is set to be sworn into office on Jan. 20, with the U.S. president-elect already making waves in the business world.
Trump sent Canadian politicians scrambling after he threatened to impose massive tariffs unless Canada and Mexico stopped the flow of migrants and illegal drugs into the U.S. The tariffs would be a significant blow to the country's most important trading relationship.
Sébastien Mc Mahon, chief strategist at iA Global Asset Management, says the first 30 days of Trump's second presidency will set the tone for things to come.
"If Donald Trump comes in vengeful and not listening to his economic advisers and is dogmatic on all of these issues, God knows how bad things can go," he said.
But Mc Mahon says he thinks we are getting a big dose of "The Art of the Deal,” referring to Trump’s book on negotiating tactics.
“The idea here is that when you're entering a negotiation, you kind of need to throw stuff out just to create options for yourself,” he said.
It is hard to imagine a scenario where the U.S. would slap tariffs on Canadian oil and gas since it would drive up gasoline prices, or auto parts that cross the border multiple times before ending up in a finished vehicle, but what the final outcome might be is unknown.
The free-trade agreement between Canada, the United States and Mexico is also up for review in 2026, and preparations for those talks are expected to begin before that happens.
Stock markets
Canada's main stock index traded at record highs in 2024 as it topped 25,000 points for the first time. The strength came in the second half of the year as Canadian financial and technology stocks pushed markets higher.
Mc Mahon said moves by Trump to cut corporate taxes and increase deregulation should benefit U.S. businesses.
"What's good for the U.S. economy is good for the Canadian economy generally because of the relationship that we have," Mc Mahon said.
He said the Canadian stock market had trailed the S&P 500, but the gap has now narrowed and Canadian stocks have room to rise based on their prices and earnings expectations over the next year.
"If things continue like this, you know, there's no reason not to think that the Canadian stock market should again stay in the pack with the U.S. stock market in 2025," Mc Mahon said.
Federal election
The United States isn't the only place facing political change. Canada will hold a federal election sometime in 2025 that could see a change in government.
The Conservatives enjoy a wide lead in the polls that could translate into a majority in the House of Commons.
The Tories tried unsuccessfully several times to bring down the Liberal minority government in 2024. The current speculation in Ottawa is the election will come in the spring when the government unveils its budget, but even if that doesn't happen, the fixed date for the next federal election is Oct. 20, 2025.
The Tories have been pitching a plan to end the government's carbon tax and slash spending, offering a very different alternative to how the Liberals have governed.
The Conservatives have said they would scrap the Liberal government's pledge to cap emissions from the oil and gas sector. The industry has claimed the emissions cap is the equivalent to a cap on production and would result in job losses.
Real estate
Mortgage rates are coming down but the housing market has so far been slow to respond, and high home prices are still making buying a home in many big Canadian cities a difficult goal for many families.
Davelle Morrison, a real estate broker at Bosley Real Estate Ltd., said 2024 was a terrible year for the real estate market, but she expects things to turn around in 2025.
"I know it's gonna be better," she said. "People are gonna come to the table to buy because I think people have sat on the sidelines for long enough."
One factor helping buyers will be lower interest rates. The Bank of Canada cut interest rates five times in 2024 to bring its policy rate to 3.25 per cent. The big banks have followed with cuts to their prime rates, taking down the cost of variable-rate mortgages and other floating-rate loans.
But Morrison said she doesn't think the market is going to return to the frenzied days of 2021 and early 2022 when prices soared.
"I don't think it's gonna take off as much as the sellers want it to take off next year," she said.
"I think it's gonna be a little bit higher. I just don't think it's going to be that high."
Labour
Labour unrest made headlines in 2024 as unionized workers looked to make up the ground they lost due to inflation.
Disputes at the country's big railways and ports saw the federal government step in on a number of occasions and direct the Canada Industrial Relations Board to order the resumption of operations and send contract talks to binding arbitration.
The government's move is being challenged in court by several of the unions that were affected by its decision. The unions have criticized the tactic, saying it undermines the right to collective bargaining.
Inflation is back under control, but unions that have yet to renew contracts that covered the period when inflation peaked may yet be looking to make up for lost buying power with higher wages.
This report by The Canadian Press was first published Dec. 16, 2024.
Craig Wong, The Canadian Press