Canada’s economy has shown signs of resilience in recent months, even as a renewed trade dispute with the United States threatens to complicate the outlook. The latest escalation is significant, but the available economic data as well as the BoC holding the Key Rate at 2.25% on September 2nd, offers a reminder that tariffs are only one part of a much larger Canadian economy.
With the abrupt halt of negotiations last month, it’s likely that the Bank of Canada is reforecasting the economic impact of additional U.S.-imposed tariffs. While tariffs have disrupted supply chains, which have increased consumer costs, the much-predicted economic collapse never reached households on the scale some headlines predicted. Risks remain, but the economy has shown resilience.
The good news is that July’s economic numbers showed:
- The Canadian economy grew an annualized 3.3% in 2nd quarter of 2026, the fastest pace in more than three years, according to Statistics Canada on August 28th.
- Total Inflation grew to 3% in July after another volatile month for global energy prices. CPI-median came in at 2% and CPI-trim at 1.9% year over year, indicating that the broader trend in prices remains much closer to the BoC’s 2% target.
- Canada’s economy added 75k jobs in July, moving the unemployment rate to its lowest level in two years.
Currently, it seems that the BoC anticipates that economic growth will continue to be resilient without the need for rate relief. Most economists predict the Key Rate will be held at its current level into 2027.
Nationally, real estate markets are showing encouraging signs. In July, national home sales edged up 0.5% from June. Home sales remain below last year’s levels, with July’s actual, not seasonally adjusted, activity coming in 5.3% below July 2025. But looking only at the year-over-year number misses some of the more encouraging momentum. Sales have now increased month over month for four straight months, while the National Composite MLS® Home Price Index edged up 0.1% in July – its first monthly increase since November 2024. It’s not a rebound – but rather a steady, incremental improvement.
Wondering how economic activity affects homebuying and home selling plans? Let’s look at the numbers that matter most – right here in our local market.
