Bank of Canada Governor Tiff Macklem is feeling cautiously sunny about the Canadian economy, signaling that signs of expansion are becoming harder to ignore.
The optimism comes against a backdrop of GDP projections that are, well, modest. The Bank of Canada’s April 2026 Monetary Policy Report pegged Canadian GDP growth at 1.2% for 2026, ticking up to 1.6% in 2027 and 1.7% in 2028. Growth is expected to be supported by a gradual increase in exports and business investment, as the economy absorbs existing slack.
The rate picture and what it means for risk assets
The policy interest rate sits at 2.25%, and the BoC appears content to leave it there for now. Inflation is expected to hover around the bank’s 2% target after a brief uptick, with alignment anticipated by early 2027.
Q2 2026 economic data has reinforced Macklem’s optimism, with revisions showing stronger-than-expected performance in consumption and housing.
