Canada will need businesses to ramp up investment at home next year as U.S. trade restrictions weigh on exports, but continued uncertainty over access to the country’s largest trading partner could complicate that recovery, according to a new economic outlook. 

Deloitte expects non-residential business investment to grow 3.5 per cent in 2027, more than double the 1.6 per cent projected this year, even as export growth slows to just 0.3 per cent. 

That investment rebound is expected to help offset some of the weakness from trade, but hinges on major projects moving ahead and businesses regaining confidence. 

The forecast comes two weeks after Ottawa emerged from the Canada Investment Summit touting nearly $500 billion in new investment commitments, putting a spotlight on how quickly those pledges can translate into project and workforce growth. 

READ MORE: Investment summit nets billions in commitments, but deals will take time 

“It’s now execution,” Dawn Desjardins, Chief Economist at Deloitte said in an interview with iPolitics. 

Desjardins said the timing remains difficult to gauge, with the stronger growth Deloitte expects next year depending in part on investment commitments turning into projects. 

At the same time, weaker exports will continue to drag on the economy. 

“We are going to see some of our industries, some of our companies come under snipping pressure – it’s going to be really challenging,” Desjardins said. 

The federal government says recent policy changes are already helping attract investment to Canada.

A spokesperson from Finance Minister Francois-Philippe Champagne’s office pointed to the nearly $500 billion in commitments announced following the summit, along with recent major private-sector projects, as evidence that its effort to improve the investment environment are working.

“The government is moving with pace and conviction to at once enable investment in and expedite the processes around capital investment spending in Canada,” John Fragos, spokesperson for Finance Minister Champagne wrote in a statement to iPolitics. 

Fragos cited the productivity mega deduction, the government’s recent omnibus bill C-39 Building Canada Strong Act, and the Major Projects Office.

READ MORE: Carney’s moves on labour and environment could create an opening for the opposition 

“And it’s working,” Fragos said.

But attracting investment is one thing. Continued uncertainty over Canada’s access to the U.S. market could complicate how quickly businesses put that capital to work. 

Andrew DiCapua, Principal Economist at Canadian Chamber and Business Data Lab, said Canadian businesses have been holding back on investment before the latest trade tensions, but tariffs have now added another layer of uncertainty – including for international investors weighing Canada’s future access to the U.S. market. 

“I think the worry is that what does market access to the United States look like after all this clears?” DiCapua said.

Still, Canada has gained attention as an investment destination and recent federal policy changes have helped create momentum, he said. It’s just about making sure that attention is turns into “concrete deals,” DiCapua added.

Attracting investment at home is only a part of Canada’s effort to reduce its vulnerability to the U.S. market. Businesses are also looking for customers abroad, a shift that DiCapua said will take considerably more time. 

“We’ve seen progress on trade diversification in terms of value, but our concern is that we’re not enabling more traders,” DiCapua said. 

“Even though the value has increased, the number of Canadian exporters that have shifted to overseas markets has not picked up noticeably,” he said. 

DiCapua said much of Canada’s recent diversification has been “concentrated” in a handful of commodities, including gold, crude oil and LNG and some gains in aluminum helping offset declines in exports to the U.S., but that shift has yet to spread across smaller Canadian businesses. 

Of Canada’s roughly 45,000 exporters, about two-thirds sell only to the U.S., DiCapua said. He explained that smaller companies in particular, end up facing challenges like language barrier, higher insurance costs, and potentially higher shipping costs. 

“We’re just going to need to see a much broader uptake, which is going to take a significant amount of time,” DiCapua said. 

“Businesses are the ones that are going to need to diversify, empower the economy, and you know there there are some signs of optimism, but still significant headwinds.”