March 2025 Market Update from Canada Life Investment Management

Global equity markets declined over the month of March. Growing trade tensions and fears of a strong pullback in economic activity in response to tariffs weighed on investor sentiment. Tariffs came into effect in March, with more expected in April. The Bank of Canada (“BoC”) and European Central Bank (“ECB”) lowered interest rates over the month, citing concerns over global trade tensions.

In Canada, an uncertain outlook for the economy has begun to weigh on consumer and business activity. Consumer spending has subsided while businesses expect to slow hiring and capital expenditures. Inflation moved higher, in large part due to the end of the sales tax holiday. Manufacturing activity has weakened in recent months. Canada’s manufacturing sector could be hindered by extensive tariffs.