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This newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.

US tariffs remain elevated. The future of trade in North America continues to be highly uncertain.

This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.

Firms’ sentiment remains subdued, according to results from the Business Outlook Survey and the Business Leaders’ Pulse. After a weak year, domestic sales growth is expected to improve slightly. Export sales are expected to be modest. Most businesses plan to maintain or decrease current staffing levels, and they continue to prioritize investment spending on routine maintenance. Firms reported less pressure than last quarter from tariff-related cost increases. Most do not anticipate substantial increases in selling prices. Inflation expectations remain roughly stable between 2.5% and 3%.

The Canadian economy entered 2022 in a strong position. The Bank is forecasting growth of 4% in 2022 and about 3½ % in 2023.

Views from Canadian firms on past, current and future business conditions provide timely input into the Bank’s monetary policy decision-making process.

The Canadian economy continues to evolve as expected. Average quarterly growth was subdued in 2025, weighed down by US tariffs and slowing population growth. CPI inflation remains near the 2% target.

The United States has threatened, imposed and suspended tariffs on its trading partners, including Canada. Many tariffs remain in place, and it is unclear what will happen next. This section outlines two illustrative scenarios for how US trade policy could unfold.

Various drivers of business investment can be used to explain the underwhelming performance of investment in advanced economies since the global financial crisis, particularly since 2014. The slow growth in aggregate demand cannot by itself explain the full extent of the recent weakness in investment, which appears to be linked primarily to the collapse of global commodity prices and a rise in economic uncertainty. Looking ahead, business investment growth is likely to remain slower than in the pre-crisis period, largely because of structural factors such as population aging.