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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.

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on June 10, 2026.

This article presents the key results from the 2026 Bank of Canada Financial System Survey, conducted between February 23 and March 13. The survey included a special section on the use and risks of artificial intelligence (AI).

Canada’s financial system has functioned well through a challenging year. Households and businesses remain in stable financial condition, and banks have strengthened their capacity to absorb shocks. However, vulnerabilities have increased in some parts of the system, and a more turbulent global environment poses risks to financial stability.

Quarterly Financial Report - First Quarter 2026 - For the period ended March 31, 2026

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on April 29, 2026.

The Market Participants Survey results are based on questionnaire responses from about 28 financial market participants.

The Canadian economy is expected to grow at a moderate pace as it continues to adjust to US tariffs. Inflation has moved up due to higher oil prices linked to the war in the Middle East. It is projected to then ease back to the 2% target in 2027.