‘Early Stages of a Recession’: Canada Hits the Skids as iShares S&P / TSX 60 Index ETF Stock (TSE:XIU) Slips

Canada is already in the early stages of a recession, and that is being reflected in the iShares S&P / TSX 60 Index fund (TSE:XIU), which slipped fractionally in Friday morning’s trading. Rising unemployment, declining exports, and the ongoing trade war with the United States officially moved the needle into at least the starting point for a recession.

Bloomberg recently staged a survey of several economists, and the answer came out disturbingly similar across said pool: Canada’s economic output will shrink 1% in the second quarter, and lose another 0.1% in the third quarter. That makes for a technical recession, assuming that is the metric you use to calculate a recession. Most do, but this is not always the case.

At any rate, exports are in free-fall as Canadian firms attempt to come to grips with the tariffs out of the United States, down 7.4% already. And unemployment is on the rise to match; said economists are looking for the Canadian unemployment rate to hit a frightening 7.2% in the second half of 2025, though 2026 will see a certain amount of easing. Moreover, inflation will still run higher than the central bank wants to see, hitting 2.1% in the third quarter, and 2.2% in the fourth quarter.

That’s How You Know it’s a Recession

In perhaps the clearest indicator that a recession is already in play—or perhaps Canada’s death throes—the Canadian Revenue Agency is firing 280 people due to budgetary constraints. Yes, you read that right; the equivalent of the IRS in Canada is firing people because it does not have the cash to pay them.

Most of the dismissals will be focused on the National Capital Region, reports note. And this comes on top of earlier reports from the Union of Taxation Employees that noted the CRA would not be renewing contracts for over 1,000 “term workers.” With COVID-19 related funding now lost, the CRA is operating on a lower budget. This in turn is sending employee counts into open decline.

Is the iShares S&P / TSX 60 Index ETF a Good Buy Right Now?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:XIU shares based on 50 Buys, 10 Holds and one Sells assigned in the past three months, as indicated by the graphic below. After a 16.1% rally in its share price over the past year, the average TSE:XIU price target of $43.16 per share implies 10.62% upside potential.

See more TSE:XIU analyst ratings

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