Short-term Canadian outlook is lacklustre, but nation-building plan bodes well for long term prosperity

The U.S. trade war is, not surprisingly, hammering Canada’s economy. Last quarter’s sharp contraction of output, due to plummeting exports, means Canada is now on track to see its GDP grow by about 1.1% in 2025, which is well below the economy’s potential. And because of persistent structural problems i.e., beyond cyclical factors such as the ongoing trade war, 2026 is not looking great either. In this Economic and Financial Market Update, we explain what that means for inflation, interest rates, and the Canadian dollar going forward.

On track for a third consecutive year of sub-2% growth

Read more