Results from the Business Outlook Survey and the Business Leaders’ Pulse indicate that firms’ sentiment improved in the third quarter. Most survey responses were collected before Canada-US trade talks broke down and new counter-tariffs were announced. Firms reported better outlooks for domestic and export sales, and investment intentions remained robust. Expectations for input and selling price growth and for inflation eased but remained elevated. Responses collected after trade talks broke down suggest that renewed trade tensions are dampening firms’ sentiment and export and investment outlooks. The new tariffs and counter-tariffs are putting upward pressure on costs, prices and inflation expectations.

Results of the third-quarter 2026 survey show that consumers’ long-term inflation expectations rose to match elevated shorter-term expectations. Consumers continued to cite trade tensions and energy prices as key sources of inflation. Expectations at all horizons moved higher following the breakdown of trade talks between Canada and the United States. Before trade talks broke down, the Canadian Survey of Consumer Expectations (CSCE) indicator edged higher, reflecting improvements in consumers’ views of their financial health. Consumers cited gains in financial asset values and greater confidence in the labour market as reasons for these improved views of financial health. Workers’ perceptions of the labour market moved closer to their survey average. Perceptions improved among workers more exposed to trade with the United States but deteriorated among workers in sectors where artificial intelligence poses a higher risk of task replacement. At the same time, spending plans deteriorated from already weak levels as high prices and economic uncertainty continue to weigh on consumers.

An older population and fewer immigrants are changing the economy by shrinking the workforce and shifting what people consume.

Senior Deputy Governor Carolyn Rogers discusses housing affordability, focusing on how it became such a challenge over time and why there are no easy solutions.