‘Data for Business’ is an effort of the Langley Chamber, in partnership with the Canadian Chamber’s Business Data Lab, to bring our members reports, stats, and analysis on economic and business data to help inform business and investment decisions. Read our latest update below:

This week, the Bank of Canada held its policy interest rate at 2.25%, a decision widely expected by economists. The Bank does not appear to be buying the recent resilience in the economic data.  Uncertainty is back front and centre, with Governor Macklem stressing that uncertainty remains “high,” citing renewed geopolitical concerns. This is consistent with the Bank’s updated forecast, which anticipates Canada’s GDP growing just 1.1% in 2026—below market expectations. For context, the International Monetary Fund recently released its latest assessment of the Canadian economy, forecasting 1.6% growth this year.

Key Info:

The Bank released its January Monetary Policy Report (MPR) alongside the decision, showing that the Canadian economy is now 1.5% smaller than projected last year.

The Canadian economy is expected to grow 1.1% in 2026, following GDP growth of 1.7% in 2025, with the fourth quarter on track to provide a weak handoff. Weaker growth this year will be driven in part by slower population growth.

Business investment is now expected to make a modest contribution (0.1 percentage points) to GDP growth, supported by incentive measures in Budget 2025 and an assumption that firms will gradually adjust to the new U.S. tariff environment. A small rebound in residential investment is also expected to support growth. It remains unclear how the Bank is measuring the extent to which CUSMA renewal uncertainty is weighing on business investment.

Goods exports continue to recover from the export shock, with diversification into other markets supporting some of the rebound. Exports to non-U.S. markets are up roughly 13%. The durability of this trend will depend on how effectively firms can shift supply chains, as exports remain on a lower trajectory due to U.S. tariffs.

Final domestic demand is expected to improve in 2026, with consumption per person picking up. Overall consumption will be one of the main contributors to GDP growth, though weak consumer sentiment and a significant volume of mortgage renewals in 2026 pose key challenges.

Hiring intentions among firms surveyed by the Bank remain muted. Despite this, the Canadian economy added 190,000 jobs last year. Sectors with higher reliance on U.S. demand experienced employment losses of about 30,000 jobs, based on latest payroll data.

The global economy is forecast to grow 3.2% in 2026, up 0.3 percentage points from October’s report. Once again, the Bank expects stronger growth in key economies. U.S. GDP received the largest upward revision for 2026, now projected at 2.6%, up 0.4 percentage points from October.

Commentary:

"The Bank of Canada holding rates at 2.25% was widely expected and reflects its view that policy is already close to neutral. But the message from the governing council is pretty clear: the Canadian economy is still underperforming. Growth continues to disappoint, and uncertainty around U.S. tariffs remains a real concern, even a year later. We think the Bank is likely to stay on the sidelines for now, keeping rates on hold as weak growth outweighs inflation risks. Despite some recent optimism about the economy, it doesn’t look like minds are convinced at the Bank. Looking ahead, there are still major challenges looming, from the CUSMA review to demographic pressures and softer consumer spending." - Andrew DiCapua, Economist, Canadian Chamber of Commerce