Cover story · Trade · August 23, 2026
Canadians overwhelmingly backed the prime minister's decision not to sign. The price is a 50% U.S. duty on hundreds of products, a weaker loonie and, by one estimate, as many as 90,000 jobs.
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Two reads on a quarter tracking above 3%
A 0.3% rise in May GDP, an upward revision to April and a positive June flash put second-quarter growth near 3.4% annualized — well above what the Bank of Canada pencilled in two weeks earlier.
RBC's weekly note ahead of the GDP release finds consumer spending, business investment and housing all contributing — while a post-deadline update warns the new 50% tariffs will hit targeted sectors hard.
What the collapse of talks costs, and who pays
Canadians overwhelmingly backed the prime minister's decision not to sign. The price is a 50% U.S. duty on hundreds of products, a weaker loonie and, by one estimate, as many as 90,000 jobs.
Desjardins now sees growth slowing to about 1% annualized over the rest of 2026, down from 2%. How much worse it gets depends on Washington's next move and how much Ottawa is willing to spend.
Hiring finds a floor
July's Labour Force Survey blew past forecasts for a modest gain, with Ontario supplying most of the hiring and private employers doing the work while the public sector shed positions.
An energy story, so far
Headline CPI rose from 2.8% in June, driven by fuel prices that are up 26% from a year ago. Strip out food and energy and the picture looks close to the Bank of Canada's target.
Six months up, then a pause
Retail sales rose 0.6% in June, extending a long winning streak. But Statistics Canada's early read on July points to a 0.8% drop, the first decline since the turn of the year.
Statistics Canada's release shows sales up in seven provinces, a 3.9% surge in the Toronto area and e-commerce climbing to nearly 8% of all retail trade.
Toward balance
July sales totalled 43,578, 5.3% below a year earlier yet slightly higher than June. Beneath the national figures, markets that were too hot or too cold are converging on normal.
Two forecasters, one cautious verdict
The Quebec-based group's August outlook tracks a sharp rebound from the winter contraction, expects a solid third quarter, and now sees the Bank of Canada tightening in early 2027 — with trade and the Gulf as the big risks.
A shallow technical recession, energy-driven inflation and a low-hire, low-fire job market add up to a central bank on hold through 2027, in the fund manager's third-quarter read on Canada.
Inside the Bank of Canada
The Governing Council's published deliberations show a committee confident about a second-quarter rebound, divided on how long it lasts, and determined not to let oil prices become persistent inflation.