The Big Story AI, EVs and HBC: Looking back at Canada's biggest business stories of 2025
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Dec 23, 2025 In a captivating discussion, Eric Kam, a professor of economics at Toronto Metropolitan University, analyzes Canada's tumultuous business landscape of 2025. He reflects on the dramatic collapse of Hudson's Bay as a symbol of retail decline. The conversation dives into the auto industry's struggles, including dwindling EV demand and tariff impacts. Kam explains why Canadian banks remain resilient amid market uncertainties and explores the complex dynamics of AI investment versus consumer hesitancy. A thought-provoking look at a pivotal year for Canada!
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Rate Cuts Don't Raise Productive Capacity
- Low interest policy kept consumption afloat but didn't raise potential GDP or productive capacity.
- Kam warns rate cuts help short-term jobs and consumption but don't strengthen long-term output.
Size Limits Canada's Trade Leverage
- Canada cannot realistically outmuscle the U.S. in trade disputes due to size and proximity advantages.
- Kam argues rhetoric won't replace the practical need for a deal with the U.S.
Auto Projects Shifted South
- Stellantis moved a planned Jeep Compass project to the U.S. and Cammie mothballed an EV plant in Ingersoll.
- Mike Epple uses these examples to show how tariffs and policy shifts rewired auto investment flows.