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
3.2% May 2026
BoC overnight rate
2.25% Jun 2026
Unemployment rate
6.5% Jun 2026

Figure 1.

Output

0 1 2 3% MAY 2024 APR 2026
Indicator Value Change As of
Real GDP, y/y 1.1% +0.7 pp Apr 2026
Real GDP, m/m 0.5% +0.7 pp Apr 2026
Per-capita GDP, y/y 0.2% -0.3 pp 2026Q1
Output gap -1.0% -0.5 pp 2025Q4

Figure 2.

Inflation

1 2 3 4% JUN 2024 MAY 2026
Indicator Value Change As of
Headline CPI, y/y 3.2% +0.4 pp May 2026
Core-trim, y/y 2.0% +0.0 pp May 2026
Core-median, y/y 2.1% +0.0 pp May 2026
CPI breadth >3% 33.6% +5.0 pp May 2026

Figure 3.

Labour

6.3 6.5 6.8 7.0 7.3% JUL 2024 JUN 2026
Indicator Value Change As of
Unemployment rate 6.5% -0.1 pp Jun 2026
Aggregate hours, y/y 0.2% -0.1 pp Jun 2026
Wage growth (LFS-Micro) 2.6% -0.5 pp May 2026
Employment rate 60.8% +0.1 pp Jun 2026

Figure 4.

Monetary

2 3 4 5% JUL 2024 JUN 2026
Indicator Value Change As of
BoC overnight rate 2.25% +0 bps Jun 2026
2y GoC yield 2.80% -5 bps Jul 9, 2026
Canada-US 2y spread -136 bps -0 bps Jul 9, 2026
Federal budget balance (FYTD) -$55.3B -$12.1B FYTD Mar 26

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% MAY 2024 APR 2026
Indicator Value Change As of
MLS HPI, y/y -4.0% +0.6 pp Apr 2026
Housing starts, 3mma 260k +4k May 2026
Bank mortgage arrears 0.28% +0.00 pp Apr 2026
Housing affordability 42.3% -0.8 pp 2026Q1

Figure 7.

Trade

-10000 -5000 0 5000 JUN 2024 MAY 2026
Indicator Value Change As of
Goods trade balance $4.2B +$838M May 2026
Current account -$7.2B -$6.2B 2026Q1
US export share 70.0% +0.8 pp May 2026
Terms of trade 107.5 +2.3 2026Q1

Figure 8.

Markets

1.35 1.38 1.40 1.43 JUN 11, 2026 JUL 10, 2026
Indicator Value Change As of
USDCAD 1.415 -0.4% 1w Jul 10, 2026
10y GoC yield 3.52% +7 bps 1w Jul 9, 2026
TSX Composite 35.3k +0.2% 1w Jul 10, 2026
WTI 71.5 +4.0% 1w Jul 10, 2026

Figure 9.

Week ahead

Monday, July 6

Time Importance Event Forecast Previous
11:30am Low BOC Business Outlook Survey — —

Tuesday, July 7

Time Importance Event Forecast Previous
8:30am Low Trade Balance 2.8B 2.7B
10:00am Medium Ivey PMI 59.1 58.2

Friday, July 10

Time Importance Event Forecast Previous
8:30am High Employment Change 11.2K 87.8K
8:30am High Unemployment Rate 6.6% 6.6%
8:30am Low Building Permits m/m 1.0% -7.6%

Calendar data from Forex Factory. Ottawa time.

Figure 10.

On our radar

  1. Jul 10 BLOOMBERG US, Canada Agree to Open Detroit-Windsor Bridge on July 27
  2. Jul 10 BLOOMBERG Canada’s Latest Jobs Data Contains Hints the Labor Market Is Healing
  3. Jul 10 REUTERS TSX rises to three-week high, led by consumer-related shares
  4. Jul 10 BLOOMBERG Canada Adds 18,200 Jobs in June as Young Workers Catch a Break
  5. Jul 10 GLOBE Opinion: Canada is taking an outsized role in the construction of the post-American world
  6. Jul 9 BLOOMBERG Carney Courts Saudi Cash in a Geopolitical Reset for Canada
  7. Jul 9 REUTERS TSX posts slight weekly decline as gold mining shares fall
  8. Jul 7 GLOBE Opinion: It’s good that we’re building pipelines, but not so good that we’re paying for them
  9. Jul 4 THE LOGIC Carmichael: The age-old trade problem Carney’s trying to solve with food
  10. Jul 1 WSJ U.S. Plunges Trade Pact With Canada and Mexico Into Doubt

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