Predictions for Canada’s economy in 2026 appear to be more steady than flashy. Experts have some good news about inflation. Unfortunately, some of their comments about housing aren’t as positive as you might hope. Here are ten expert predictions for Canada’s economy in 2026. What are you hoping will happen, financially speaking?
Just remember that these are only predictions for Canada’s economy. You should not take these predictions as financial advice and should consult a financial expert yourself before making any decisions.
OECD pegs 2026 growth near 1.1%
Let’s start with the bad news. The Organisation for Economic Co-operation and Development’s (OECD) view on 2026 isn’t great because they predict Canada’s GDP will grow by only 1.1%. They argue that slower population growth & softer export rates nationally are causing some issues.
PBO projects CPI near 1.6% in 2026
But it’s not all terrible. The Parliamentary Budget Officer (PBO) has predicted that inflation should cool off in 2026 to around 1.6%.
Lower inflation rates could mean that we should finally see prices stabilizing for gas & groceries. The PBO also forecasts that unemployment should fall. They have said it will stabilize at around 6.4%. While not a complete slowdown, the slight reduction in rates should be good news for all Canadians.
BMO forecasts policy rate down to 2.00%
The Bank of Montreal’s (BMO) economists predict that the Bank of Canada’s key rate could fall to 2.00%. They believe this will happen by early 2026.
Essentially, borrowing should be cheaper for everyone, as long as things go as planned. It would be rather good news. Canadians have had to deal with sharp price hikes over the last few years, so a reduction in the key rate would be welcome news.
RBC puts rate around 2.25% through 2026
However, the Royal Bank of Canada (RBC) isn’t as optimistic as the BMO. It believes that the central bank won’t be as aggressive on rate cuts, and will instead put the rate closer to 2.25% for the majority of 2026.
Why? Because they believe the Bank wants clearer proof. Without clear evidence that inflation is under control, the RBC believes the rate won’t go down much lower.
CMHC sees price gains cooling
The Canada Mortgage and Housing Corporation (CMHC) has good news for potential homebuyers. They expect mortgage rates to drop further and housing prices to increase only slightly during 2026. The news comes after a slow 2025, and the CMHC claims new apartment projects should resume towards the end of 2026.
Should this happen, it would give buyers more options.
Ottawa’s deficit seen at ~$30.8B in 2026/27
According to federal budget experts, Ottawa’s deficit should decrease during 2026-2027. They put it at C$30.8 billion. The figure is smaller than in recent years, although there’s still a gap, especially since spending on housing & health remains higher. But debt as a share of Canada’s GDP should reduce.
Loonie forecast points to firmer 2026
Experts at Scotiabank have good news about the Canadian dollar. They predict it could improve through 2026 & land around 1.28 against the U.S. dollar by the end of the year.
Such a figure would be a small increase from recent figures. But it’d make cross-border shopping & travel far easier for us all.
GoC bonds forecasted at C$275B in FY 2026/27
According to TD Securities, the federal government will issue roughly C$275 billion in bonds during 2026-2027. This forecast puts bonds at a lower total than the 2025 figures.
The plan also keeps borrowing options for Ottawa wide open, keeping investors happy. They want to have access to a strong & steady supply of long-term bonds.
CREA expects a 2026 rebound in sales & prices
The Canadian Real Estate Association is betting the market finds its footing again in 2026. They’re looking for home sales to rise about 7.7% and the average price to climb 3.2% once interest rates finally settle.
After two wobbly years, that would feel like a much-needed breather for both sellers & buyers trying to plan ahead.
OECD predicts policy easing aids 2026 recovery
The OECD has also predicted that lower interest rates will start to have an effect by 2026. It could mean that consumer spending & investment begin to increase.
After a few slow years, such news would be a good sign, even though it’s not forecasting a boom. The figures are pointing in the right direction.
Sources: Please see here for a complete listing of all sources that were consulted in the preparation of this article.
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