Potential output in Canada : 2026 assessment

Alex Chernoff, Christopher Hajzler, Stéphanie Houle, Gabriella Ruggero, Olena Senyuta, Karanbir Sohal, Walter Steingress, Temel Taskin

Growth in potential output is expected to drop from 2.3% in 2025 to 1.2% in 2026 given slowing population growth, US tariffs and trade policy uncertainty. It is then estimated to pick up to an average of 1.5% over 2027-29 as strengthening business and government investment supports trend labour productivity (TLP). Gradual adoption of artificial intelligence is also expected to lift TLP growth over the projection horizon. Relative to Scenario 1 in the April 2025 assessment, growth is revised up in 2025 and revised down over 2026-29.

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Year of publication:	[2026] ; Last updated: May 25, 2026
Authors:	Chernoff, Alex ; Hajzler, Christopher ; Houle, Stéphanie ; Ruggero, Gabriella ; Senyuta, Olena ; Sohal, Karanbir ; Steingress, Walter ; Taskin, Temel
Publisher:	[Ottawa] : Bank of Canada
Subject:	Monetary policy - Real economy and forecasting \| Structural challenges - Demographics and labour supply \| Models and tools - Economic models \| Geldpolitik \| Monetary policy \| Kanada \| Canada \| Arbeitsangebot \| Labour supply \| Produktionspotenzial \| Potential output \| Wirkungsanalyse \| Impact assessment \| Wirtschaftsprognose \| Economic forecast \| Theorie \| Theory \| Wirtschaftsmodell \| Economic model

Extent:	1 Online-Ressource (circa 22 Seiten) Illustrationen
Series:	Staff analytical paper. - Ottawa : Bank of Canada, ISSN 3110-9195, ZDB-ID 3237177-9. - Vol. 2026, 19
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	10.34989/sap-2026-19 [DOI]
Classification:	E2 - Consumption, Saving, Production, Employment, and Investment ; E3 - Prices, Business Fluctuations, and Cycles ; E4 - Money and Interest Rates ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit
Source:	ECONIS - Online Catalogue of the ZBW

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