In this analytical note, we provide a comprehensive assessment of the complex structural adjustment facing the Canadian economy following the commodity price decline since mid-2014. We quantify separately the impacts coming from the commodity sector restructuring and the broader effect of significantly lower terms of trade. Based on our analysis, the impact on the Canadian economy will occur in three phases. By the end of phase 3, in 2020, the level of Canadian GDP will be 2 per cent lower due to the commodity price decline than it otherwise would have been had commodity prices stayed at the mid-2014 level. At this point, the commodity sector is expected to play a smaller role in the Canadian economy.