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% Jul 2026
BoC overnight rate
2.25% Jul 2026
Unemployment rate
6.4% Jul 2026

Figure 1.

Output

0 1 2 3% JUN 2024 MAY 2026
Indicator Value Change As of
Real GDP, y/y 1.7% +0.5 pp May 2026
Real GDP, m/m 0.3% -0.2 pp May 2026
Per-capita GDP, y/y 0.2% -0.3 pp 2026Q1
Output gap -1.3% -0.3 pp 2026Q1

Figure 2.

Inflation

1 2 3 4% AUG 2024 JUL 2026
Indicator Value Change As of
Headline CPI, y/y 3.0% +0.2 pp Jul 2026
Core-trim, y/y 1.9% +0.0 pp Jul 2026
Core-median, y/y 2.0% +0.1 pp Jul 2026
CPI breadth >3% 27.8% -0.1 pp Jul 2026

Figure 3.

Labour

6.3 6.5 6.8 7.0 7.3% AUG 2024 JUL 2026
Indicator Value Change As of
Unemployment rate 6.4% -0.1 pp Jul 2026
Aggregate hours, y/y 0.9% +0.7 pp Jul 2026
Wage growth (LFS-Micro) 2.7% +0.1 pp Jun 2026
Employment rate 60.9% +0.1 pp Jul 2026

Figure 4.

Monetary

2 3 4 5% AUG 2024 JUL 2026
Indicator Value Change As of
BoC overnight rate 2.25% +0 bps Jul 2026
2y GoC yield 2.90% -6 bps Aug 25, 2026
Canada-US 2y spread -127 bps +1 bps Aug 25, 2026
Federal budget balance (FYTD) -$1.4B +$8.5B FYTD May 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% MAY 2024 APR 2026
Indicator Value Change As of
MLS HPI, y/y -4.0% +0.6 pp Apr 2026
Housing starts, 3mma 241k -14k Jul 2026
Bank mortgage arrears 0.29% +0.01 pp May 2026
Housing affordability 42.3% -0.8 pp 2026Q1

Figure 7.

Trade

-10000 -5000 0 5000 JUL 2024 JUN 2026
Indicator Value Change As of
Goods trade balance $3.9B +$158M Jun 2026
Current account -$7.2B -$6.2B 2026Q1
US export share 68.7% -1.3 pp Jun 2026
Terms of trade 107.5 +2.3 2026Q1

Figure 8.

Markets

1.35 1.38 1.40 1.43 JUL 28, 2026 AUG 26, 2026
Indicator Value Change As of
USDCAD 1.388 +0.4% 1w Aug 26, 2026
10y GoC yield 3.62% -8 bps 1w Aug 25, 2026
TSX Composite 36.8k +1.1% 1w Aug 26, 2026
WTI 82.2 -4.2% 1w Aug 26, 2026

Figure 9.

Week ahead

Monday, August 24

Time Importance Event Forecast Previous
8:30am Low Corporate Profits q/q — -2.0%

Thursday, August 27

Time Importance Event Forecast Previous
8:30am Low Current Account 3.5B -7.2B

Friday, August 28

Time Importance Event Forecast Previous
8:30am High GDP m/m 0.2% 0.3%

Calendar data from Forex Factory. Ottawa time.

Figure 10.

On our radar

  1. Aug 27 BLOOMBERG ‘Foolishness’: Trump’s Order Renaming Lake Ontario Draws Jeers, Worry in Canada
  2. Aug 27 GLOBE Opinion: How Canada can best respond to threats from the United States
  3. Aug 27 BLOOMBERG Canada Can Weather Latest US Tariffs, Economists Tell Carney’s Finance Chief
  4. Aug 27 BLOOMBERG Canada Adds 50% Tariffs to US Copper Wire, Wood Charcoal
  5. Aug 26 REUTERS TSX pulls back from record high as metal mining shares fall
  6. Aug 25 REUTERS Canada slaps retaliatory tariffs on US goods worth $20 billion as trade war intensifies
  7. Aug 25 GLOBE Opinion: The whole world is watching as Canada stands up to Trump
  8. Aug 25 WSJ Canada Hits Back at U.S. With Tariffs Targeting Midterm Hot Spots
  9. Aug 22 THE LOGIC Carmichael: Carney the prime minister still manages risk like a central banker
  10. Aug 20 WSJ Canada Trade Official Says Tariff Deal With U.S. ‘Very Close’

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