Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsEconomyEconomists slash Canada 2026 growth outlook after recession talkForecasters still see the Bank of Canada holding its policy rate at the current 2.25 per cent for the rest of 2026Author of the article:Last updated 38 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.Most economists and the Bank of Canada have rejected the recession label, but mounting damage from U.S. trade policy and slowdown in immigration of non-permanent residents have led to weaker growth. Photo by Peter J. Thompson/PostmediaA surprise economic slump to start the year prompted forecasters to slash their expectations for Canada’s growth for 2026.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorEconomists in a Bloomberg survey now see Canada’s economy expanding just 0.7 per cent this year after shrinking in the first quarter. If it comes to pass, it would be the weakest yearly pace of growth since 2015, outside the COVID-19 pandemic.It’s a big step down from previous forecasts of 1.2 per cent growth, and would bring the country’s expansion more closely in line with its peers in the Group of Seven. Previously, Canada’s growth outlook was seen as lagging only the United States among those countries.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againThe economy shrank 0.1 per cent on an annualized basis in the first three months of 2026, significantly missing analysts’ forecasts for a 1.5 per cent expansion. That was partly driven by an unexpected drop in federal defence spending, and though small, it marked a second consecutive quarterly contraction, satisfying one condition of a recession.Most economists and the central bank have rejected the recession label for the downturn, but mounting damage from U.S. trade policy and an abrupt slowdown in immigration of non-permanent residents have led to weaker growth.At the same time, the sluggish start to the year led analysts to revise their forecasts higher for the second quarter. They now see the economy expanding at a 1.9 per cent pace, up from 1.4 per cent, from April through June.There’s evidence that the lingering uncertainty about the fate of the trade agreement between Canada, the U.S. and Mexico continues to sap business optimism. Economists cut their outlook for gross fixed capital investment, which they see expanding at a 0.4 per cent clip this year, down from a previously expected 0.8 per cent gain.Inflation forecasts were little changed — analysts see the consumer price index rising at an average pace of 2.6 per cent in 2026 before decelerating to the Bank of Canada’s two per cent target next year. The unemployment rate is expected to peak at 6.7 per cent in the second and third quarters of this year, falling to six per cent by the end of 2027.Forecasters see the Bank of Canada holding its policy rate at the current 2.25 per cent for the rest of 2026, before hiking rates in the second quarter of 2027.The survey of 28 economists was conducted between June 19 and 24.—With assistance from Mario Baker Ramirez. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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