Last updated: September 11, 2026
Canada’s economic activity has cooled notably following a volatile post-pandemic cycle. Real GDP growth, on a year-on-year basis, moved from a peak of 3.1% in Q4 2024 down to 1.13% in Q2 2026, touching a low of 0.06% in Q1 2026. The output gap, expressed as a percentage of potential GDP, shifted from positive territory earlier in the decade—reaching 1.23% in 2022 and 0.36% in 2024—to slight spare capacity, registering -0.27% in 2026 and -0.0 in 2027. Meanwhile, the unemployment rate moved in a band between 6.4% and 6.9% across the reported months, resting at 6.4% in the latest reading for August 2026.
Price pressures have fluctuated, with CPI inflation moving between 1.78% and 3.23% through early-to-mid 2026, registering 3.03% in July 2026. In response to shifting economic conditions, the Bank of Canada kept its policy rate entirely steady at 2.25% across every month from January 2026 through August 2026.
Public finances reflect ongoing budget deficits and rising debt loads. Government revenue moved between 325.46 billion of national currency and 350.17 billion of national currency across quarters in 2024 and 2025, while government expenditure ranged from 323.14 billion of national currency to 368.67 billion of national currency over the same period. The government budget balance, measured as net lending/borrowing, stayed in deficit between -2.12% of GDP and -1.31% of GDP through the last eight quarters, sitting at -1.66% of GDP in Q2 2026. Official government debt climbed from 108.31% of GDP in Q3 2024 to 115.7% of GDP in Q1 2026. A broader measure of total financial liabilities of the general government ranged from 120.02% of GDP up to 127.16% of GDP in Q1 2026, diverging from the official figure due to differing measurement perimeters.
Household sector metrics warrant close attention. The household debt-to-income ratio held in a tight band between 1.79 and 1.83 over the past eight quarters, standing at 1.82 in Q1 2026. More volatilely, the household net saving rate swung widely, dropping as low as 0.25% of disposable income in Q2 2025 and Q2 2026 while reaching highs such as 7.75% in Q4 2024, before landing at 0.25% in the latest reading. Sustained low savings combined with elevated debt historically precede periods of financial instability.
In foreign trade, Canada continues to run a goods trade deficit with the world. Over the six-year span from 2020 to 2025, annual goods exports moved from 390,141.06 million of national currency up to a peak of 596,957.71 million of national currency in 2022, before settling at 557,136.46 million of national currency in 2025. Annual goods imports followed a similar path, rising from 428,466.77 million of national currency in 2020 to 601,421.86 million of national currency in 2022, and totaling 597,133.78 million of national currency in 2025.
Energy and input costs present mixed exposures. Net electricity imports remained negative across eight years—reaching -12.43 billion kWh in 2024—meaning Canada is a net electricity exporter; given the scale of the economy, this import figure is immaterial and poses no structural vulnerability. General input costs shifted as the Brent crude oil price moved from 61.81 US dollars per barrel in December 2025 to a peak of 103.84 US dollars per barrel in May 2026, before settling at 83.73 US dollars per barrel in July 2026. Concurrently, the WTI Crude price—a key export commodity for Canada—moved from 58.04 US dollars in December 2025 to a high of 102.05 US dollars in May 2026, ending at 79.71 US dollars in July 2026. Petroleum and other liquids production moved between 6,123.07 thousand barrels per day and 6,638.17 thousand barrels per day over the final eight months, highlighting export revenue exposure to commodity price swings.
The currency value against the IMF Special Drawing Right (SDR) basket moved between 1.87 units of currency per 1 SDR and 1.91 units of currency per 1 SDR across the last eight months, standing at 1.9 units of currency per 1 SDR in September 2026. This slight overall weakening compared to August 2025 provides modest support to export competitiveness while marginally adding to imported inflation pressures.
Overall, Canada’s economy is experiencing subdued growth alongside minor spare capacity and steady interest rates from the Bank of Canada. While public debt metrics edge upward and household savings remain compressed, commodity exposures and a stable currency continue to shape its macroeconomic trajectory.
This bulletin is generated with AI assistance from the structured economic data collected across this site (national accounts, sector accounts, trade, energy and currency data). It is intended as an accessible summary, not investment advice — figures may be revised as underlying data sources are updated. For the detailed underlying series, see the Nation Account Data and Economic Data sections in the menu above.