The January 2026 Monthly Forecast Update from RBC Economics includes a forward-looking analysis of Canadian, US and international financial market trends.
Highlights
- Both the Bank of Canada and Federal Reserve are expected to keep interest rates unchanged in 2026, with Canada’s rates at neutral levels and US rates still slightly restrictive.
- Demographics are reshaping Canada’s growth story. Zero population growth in 2026 means GDP will expand at a slower rate this year.
- Immigration caps and an aging population will stall labour force expansion in Canada and the United States.
- Upside GDP surprises in 2025 came despite labour market softening, implying productivity gains—not job creation—fuelled economic expansion.
“Canada will experience zero population growth in 2026 for the first time on record dating back to the 1950s due to the government’s pivot on immigration policy. This leaves headline GDP growth driven solely by per-capita improvements.”
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