Trade tensions top risk for Canada’s economy, BoC survey finds
Ninety-six percent of participants listed an increase in trade tensions among the top three downside risks to Canada’s economic growth.
Tightening global financial conditions came second at 65%, with 42% naming rising geopolitical risks.
On the upside, 92% identified an easing of trade tensions as the most significant potential growth driver, with 58% pointing to larger-than-expected fiscal stimulus. Decreasing geopolitical risks, stronger consumer spending, and a stronger housing market were each named by 31% of respondents.
↓ Downside risks
| Increase in trade tensions | 96% |
|
| Tightening of global financial conditions | 65% |
|
| Increasing geopolitical risks | 42% |
|
↑ Upside risks
| Easing of trade tensions | 92% |
|
| Larger-than-expected fiscal stimulus | 58% |
|
| Decreasing geopolitical risks | 31% |
|
| Stronger consumer spending | 31% |
|
| Stronger housing market | 31% |
|
Source: Bank of Canada Market Participants Survey, Q2 2026. Respondents selected up to three risks. n = 26.
Growth outlook dims before the worst landed
The survey’s GDP forecast carries added weight given its timing. The median real gross domestic product (GDP) growth estimate for 2026 came in at 1.3% year-over-year, 0.3 percentage points below the prior May survey, before recovering to a projected 1.9% by end-2027.
The survey closed weeks before the United States announced it would not be renewing the Canada-United States-Mexico Agreement (CUSMA) for another 16 years, triggering rolling annual reviews for up to a decade.
