Canada spent 2025 facing what many believed would be a catastrophic trade shock: Fears of the short- and long-term consequences from tariffs pushed consumer and business confidence deeply negative, according to RBC.
“Yet, the economy didn’t collapse, and in 2026, we expect Canadian resilience is likely hear to stay even in the face of significant global economic fog for the many reasons we laid out here.
“Still, Canada’s complex and evolving economy is incompletely captured by a single GDP outlook. So, in the coming year, RBC Economics will focus on six big themes that dive beyond the traditional economic forecast, speaking directly to the economic stories impacting Canadian households and businesses.”
- Trade risks persist: Uncertainty will remain in 2026, but our focus will be on the long legs of this transitional moment, and perhaps a bit less on the headlines around the extension of CUSMA.
- Demographic challenges compound: Immigration is not the only demographics story with a shift downwards in labour supply from aging baby boomers as Canada hits peak population aging in the next five years.
- Rise of regional economies: Some regions see positive momentum, others are hitting major headwinds, and some are experiencing a mix of both.
- Affordability weighs: Structural challenges remain at the forefront. In particular, how persistently elevated house prices, weaker job market prospects for some groups, and the prospect of ongoing equity market strength interacts with higher wages given lower labour supply ahead.
- Monetary to fiscal handoff: Canada is likely to see leadership shift from the central bank to the government to provide support for near term economic weakness, and build for future resilience.
- Growth pivot starts to take shape: Private investment, fiscal strategies, reorientation, new supply chains and infrastructure plans will see more traction.
The full report can be found here.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
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