The March 2026 Monthly Forecast Update from RBC Economics includes a forward-looking analysis of Canadian, US and international financial market trends.
Highlights
- Middle East geopolitical tensions are expected to push oil prices higher—but the net impact on Canadian and US economic growth remains neutral.
- CUSMA exemptions continue to shield Canada from broader US tariff measures, maintaining Canada’s average tariff rate at 3.7% (among the lowest of major US trade partners) despite Supreme Court ruling on IEEPA and new Section 122 tariffs.
- Headline inflation forecasts were upgraded to 2.4% for Canada and 2.9% for the United States following higher oil price assumptions while GDP growth, unemployment rates and central bank projections remain unchanged.
- The Bank of Canada and the Federal Reserve are expected to “look through” near-term oil price volatility and maintain their on-hold stance through 2026, with the BoC keeping rates at 2.25% and the Fed at 3.5%–3.75%.
“Recent energy price spikes lack the structural permanence to spark a rebound in Canadian oil and gas investment that’s been soft for a decade. Without an investment response, the net impact on the Canadian economy is likely neutral.”
The third-party content used in this document/site is not intended to and does not constitute an endorsement by RBC Investor Services (RBCIS) of the author or the third-party materials. The content and views within the third-party material are solely those of the third party and do not reflect the opinions of RBCIS. These materials are provided by RBCIS for general information purposes only. RBCIS makes no representation or warranties and accepts no responsibility or liability of any kind for their accuracy, reliability or completeness or for any action taken, or results obtained, from the use of the materials. Readers should be aware that the content of these materials should not be regarded as legal, accounting, investment, financial, or other professional advice, nor is it intended for such use.