Budget officer cuts Canada's growth forecast to 0.9 per cent for 2026

Real GDP growth in 2026

0.9 %

The Parliamentary Budget Officer now expects real GDP to grow 0.9 per cent in 2026 and 1.5 per cent in 2027, down from 1.1 and 1.6 per cent in June. New US tariffs and Canada's countermeasures are the main drag.

If the tariffs last, the trade war could cost up to 185,000 jobs in Canada, budget officer Annette Ryan says. Quebec is hit hardest: its exports are down 8 per cent from 2024, while Alberta's rose 11 per cent.

Debt charges by 2030-31

83 billion $

Federal debt charges, the fastest-growing expense, rise from $24.5 billion in 2021-22 to $59.3 billion this year, and are projected to reach $83 billion by 2030-31.

Also in the forecast

• Inflation: 2.8% by end of 2026
• Unemployment: 6.6% by end of 2026
• Bank of Canada rate: 2.75% by mid-2027

The office also expects inflation at 2.8 per cent and unemployment at 6.6 per cent by the end of 2026, with the Bank of Canada raising its rate to 2.75 per cent by mid-2027.

What's next

The report lands ahead of the federal budget, which Finance Minister François-Philippe Champagne will table on Nov 5.