Canadian GDP Growth Forecasted Amid Weakening Private Investment
Event summary
- Canada's GDP expected to grow by 2.7% in Q2 and 1.6% in Q3 of 2026, per CFIB report.
- Private investment plans projected to drop sharply by 6.3% in Q2.
- CPI inflation rose to 3.1% YoY in Q2, forecasted to reach 3.4% in Q3.
- Business exits have outpaced entries for three consecutive quarters since the pandemic.
- 38% of SMEs report capital equipment and technology costs as a challenge.
The big picture
Canada's GDP growth in Q2 and Q3 is being driven by higher oil and gas prices, but rising costs are pressuring small businesses. Economic uncertainty is leading firms to scale back investment and expansion plans, while trade policy reviews and interprovincial barriers add further complexity. The sustained period of net business losses since the pandemic highlights structural challenges in the SME sector.
What we're watching
- Investment Trends
- How the sharp decline in private investment will impact economic recovery.
- Trade Policy
- Whether Ottawa can secure a stronger CUSMA deal amid SME uncertainty.
- Business Dynamics
- The pace at which business exits continue to outpace entries post-pandemic.