Where is Canada's economy right now?

The story now is the price of oil coming down. With the Strait of Hormuz standoff easing, crude has retreated. That cuts two ways for Canada. It slows down the oil and gas extraction that drove the recent pickup in growth, but it also reduces the inflation pressure coming from gasoline.

Headline inflation
3.0% Aug 2026
BoC overnight rate
2.25% Sep 2026
Unemployment rate
6.4% Aug 2026

Figure 1.

Output

0 1 2 3% AUG 2024 JUL 2026
Indicator Value Change As of
Real GDP, y/y 1.4% -0.7 pp Jul 2026
Real GDP, m/m -0.0% -0.4 pp Jul 2026
Per-capita GDP, y/y 0.6% +1.2 pp 2026Q2
Output gap -1.3% -0.3 pp 2026Q1

Figure 2.

Inflation

1 2 3 4% SEP 2024 AUG 2026
Indicator Value Change As of
Headline CPI, y/y 3.0% +0.0 pp Aug 2026
Core-trim, y/y 1.9% +0.0 pp Aug 2026
Core-median, y/y 2.0% +0.0 pp Aug 2026
CPI breadth >3% 28.2% +0.4 pp Aug 2026

Figure 3.

Labour

6.3 6.5 6.8 7.0 7.3% SEP 2024 AUG 2026
Indicator Value Change As of
Unemployment rate 6.4% +0.0 pp Aug 2026
Aggregate hours, y/y 1.4% +0.5 pp Aug 2026
Wage growth (LFS-Micro) 2.2% -0.5 pp Jul 2026
Employment rate 60.8% -0.1 pp Aug 2026

Figure 4.

Monetary

2 3 4% OCT 2024 SEP 2026
Indicator Value Change As of
BoC overnight rate 2.25% +0 bps Sep 2026
2y GoC yield 3.20% -1 bps Oct 15, 2026
Canada-US 2y spread -157 bps +4 bps Oct 15, 2026
Federal budget balance (FYTD) -$5.1B +$2.6B FYTD Jul 27

Figure 5.

Fiscal

-400 -200 0B MAR 2015 FY 2025-26 EST.
Indicator Value Change As of
Federal budget balance -$66.9B -$30.6B FY 2025-26 est.
Federal debt, % of GDP 41.1% -0.1 pp FY 2025-26 est.
Program expenses, % of GDP 15.8% -0.3 pp FY 2025-26 est.
Interest, % of revenue 10.6% +0.1 pp FY 2025-26 est.

Figure 6.

Housing

-6 -4 -2 0% SEP 2024 AUG 2026
Indicator Value Change As of
MLS HPI, y/y -3.0% +0.2 pp Aug 2026
Housing starts, 3mma 233k -9k Aug 2026
Bank mortgage arrears 0.29% +0.01 pp Jul 2026
Housing affordability 41.3% -0.8 pp 2026Q2

Figure 7.

Trade

-10000 -5000 0 5000 SEP 2024 AUG 2026
Indicator Value Change As of
Goods trade balance $4.2B +$3.4B Aug 2026
Current account $8.8B +$17.1B 2026Q2
US export share 70.6% +4.0 pp Aug 2026
Terms of trade 110.7 +3.4 2026Q2

Figure 8.

Markets

1.35 1.38 1.40 1.43 1.45 SEP 17, 2026 OCT 16, 2026
Indicator Value Change As of
USDCAD 1.415 -0.8% 1w Oct 16, 2026
10y GoC yield 3.83% -10 bps 1w Oct 15, 2026
TSX Composite 36.2k +1.4% 1w Oct 16, 2026
WTI 99.0 +7.8% 1w Oct 16, 2026

Figure 9.

Week ahead

Monday, October 19

Time Importance Event Forecast Previous
8:30am High CPI m/m 0.2% -0.1%
8:30am High Median CPI y/y 2.0% 2.0%
8:30am High Trimmed CPI y/y 1.9% 1.9%
8:30am Medium Common CPI y/y 2.6% 2.6%
8:30am Low Core CPI m/m — 0.1%
11:30am Low BOC Business Outlook Survey — —

Thursday, October 22

Time Importance Event Forecast Previous
8:30am Low IPPI m/m 0.7% 1.3%
8:30am Low NHPI m/m -0.1% -0.1%
8:30am Low RMPI m/m 0.1% 3.1%

Friday, October 23

Time Importance Event Forecast Previous
8:30am Low Core Retail Sales m/m 1.1% -0.7%
8:30am Low Retail Sales m/m 1.3% -0.7%

Calendar data from Forex Factory. Ottawa time.

Figure 10.

On our radar

  1. Oct 19 REUTERS Canada's annual inflation rate rose to 3.1% in September
  2. Oct 19 BLOOMBERG Canada Inflation Rate Edges Up to 3.1%, Core Measures Ease
  3. Oct 17 REUTERS Bank of Canada sees sharply higher inflation outlook as oil surges, Macklem says
  4. Oct 17 BLOOMBERG Macklem Sees Higher Oil Prices Boosting Growth, Inflation
  5. Oct 17 THE LOGIC Carmichael: Canada needs tax reform. Carney shouldn’t make it up as he goes along
  6. Oct 16 BLOOMBERG Alberta Early-Voter Surge Suggests Edge for ‘Remain’ Side
  7. Oct 16 BLOOMBERG Investors Prepare for Data Dump That Will Determine Canada’s Rate Path
  8. Oct 16 BLOOMBERG Anthropic Signs First Data-Center Deal in Canada With EverWind
  9. Oct 16 GLOBE Business Brief: The future of corporate taxation
  10. Oct 16 GLOBE Opinion: Radical tax reform is not just good policy: it’s the only kind likely to succeed

Bylines from a curated reporter list. Data via Google News RSS.