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

International trade benefits the Canadian economy, but changes to our trade relationships are now forcing businesses to adjust to a new reality.

Artificial intelligence is changing how much we produce and what work humans do. But we don’t yet know all the ways AI will affect the economy.

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on September 2, 2026.

Quarterly Financial Report - Second Quarter 2026 - For the period ended June 30, 2026

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on July 15, 2026.

The Market Participants Survey results are based on questionnaire responses from about 26 financial market participants.

Canada’s economy has been weak but is showing signs of improvement. Growth is expected to pick up, and inflation is projected to ease to around 2%. Uncertainty remains elevated.

Results from the Business Outlook Survey and the Business Leaders’ Pulse indicate that firms’ sentiment has deteriorated. Domestic sales outlooks have weakened amid heightened geopolitical uncertainty and elevated costs related to fuel, while export outlooks have improved because of stronger demand for commodities. Investment intentions remain solid, but fewer firms plan to add staff. More firms now expect their input and selling prices to rise, reflecting higher global oil prices. Firms’ inflation expectations are also higher than in recent quarters. Oil producers have revised their capital spending and production plans upward, citing expectations of sustained elevated oil prices.

Results of the second-quarter 2026 survey show that consumers’ near-term inflation expectations remain elevated amid ongoing trade tensions and rising concerns about oil and energy prices linked to the war in the Middle East. The CSCE indicator remains low as consumers still view the economic environment as challenging. High prices and economic uncertainty continue to weigh on household spending plans, particularly among households expecting the war to significantly raise inflation. At the same time, perceptions of the labour market improved modestly as fears of job loss eased, particularly in sectors highly sensitive to trade.