Canada's Economic Growth Expected to Rebound Amid Ongoing Risks

Canada's economic growth is expected to rebound in the latter half of this year and into 2027, according to a recent report by Signal49 Research. The think tank says hiring activity will strengthen and business confidence will recover, driven by stronger public and private investments, steady gains in consumer spending, and an easing of Canada-U.S. trade tensions.

However, the report also warns that escalating tariffs, the ongoing conflict in the Middle East, and looming demographic pressures pose significant headwinds for the Canadian economy.

Newfoundland and Labrador is expected to lead the country's economic expansion for the second year in a row, driven by higher crude prices and offshore oil projects. The province's economy will expand 3.7 per cent in 2026, but longer-term growth will be constrained by demographic pressures.

Ontario, on the other hand, is expected to post the softest growth this year, with an economy that expands just 0.2 per cent. The country's most populous province has been one of the hardest hit by U.S. tariffs, largely due to its manufacturing sector.