Canada's Economic Growth to Rebound by Year-End, Says Signal49 Research

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

However, there are significant headwinds for the Canadian economy, including escalating tariffs, the ongoing conflict in the Middle East, and looming demographic pressures. Business investment has been weak in Canada recently, but it is starting to turn around, said Richard Forbes, principal economist at Signal49 Research.

The report highlights that different regions will feel the effects of economic headwinds and tailwinds differently. 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 the economy expanding 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. Almost 100 per cent of Canadian auto production is in Ontario.