No, things aren't going to get better this year:
Amid the fog, the Bank of Canada recently said the impacts of U.S. tariffs on Canada have become “clearer.” And domestic business investment and exports south of the border have fallen, putting Canada’s economy on a lower growth path for the near future and putting upward pressure on inflation. …
The central bank also said “considerable uncertainty” remains around the path U.S. tariffs will take, with U.S. President Donald Trump having wielded the measure in unpredictable ways throughout 2025. Another source of uncertainty that remains, the bank said, is the review of the United States-Mexico-Canada Agreement (USMCA) in 2026.
Eric Miller, founder of the Rideau Potomac Strategy Group, said Canada’s economic prospects for the new year will primarily depend on what happens on the trade front and on whether Ottawa is able to secure tariff relief. …
(Sidebar: tariffs, you say?)
“Forecasting the outlook for Canada’s economy in 2026 is ultimately an exercise in caution, given the large number of domestic and international economic moving parts,” Di Matteo told The Epoch Times. He pointed to U.S. trade issues as well as stimulus coming from proposed infrastructure projects and increased defence spending.
At the same time, Di Matteo said higher inflation and economic uncertainty could dampen consumer confidence and spending, which could be worsened by declining home construction and lower immigration. …
(Sidebar: if you depended on unvetted migration to fix the labour crises we have and/or don’t have, you’re part of the problem.)
Fitch Ratings said Canada’s rating is “broadly stable” but warned that “persistent fiscal expansion” and increasing debt have negatively impacted the country’s credit profile and could add more pressure over the medium term.
“This may be exacerbated by persistent economic underperformance caused by tariff risks and structural challenges, including low productivity,” said the agency. A country’s credit rating impacts its ability to borrow and attract foreign investment.
(Sidebar: ahem.)
Fitch rates Canada “AA+,” a notch under “AAA.” Other ratings agencies like S&P and Moody’s rate Canada “AAA.”
Along these lines, Herbert Grubel, professor emeritus of economics at Simon Fraser University, has warned about Canada’s current fiscal track. He said in a recent Financial Post commentary that the country could be headed toward a “1990s-style fiscal reckoning,” where high debt levels lead to Canada’s credit rating falling further, interest rates rising, and the need for the government to declare bankruptcy.
Grubel told The Epoch Times he is concerned there will be more federal deficits “for the foreseeable future,” with no willingness to balance the budget. While Budget 2025 had the fiscal anchors of balancing day-to-day operating spending with revenues by 2028–29 and maintaining a declining deficit-to-GDP ratio, the budget does not commit to having a declining debt-to-GDP ratio as did the previous two budgets.
“Everybody agrees you can’t pile on debt forever. There must be a critical point at which people who are lending you money say we don’t trust that you can repay it, and you get into a crisis,” Grubel said, adding that he could not predict at what point Canada’s debt level would become unsustainable. …
When it comes to food inflation, it is expected to keep outpacing general inflation.
The recently released 2026 edition of Canada’s Food Price Report, produced by Dalhousie University professor Sylvain Charlebois, says that Canadians will see food inflation of between 4 percent and 6 percent next year. This will lead the average family of four to pay up to $17,571.79 for food in 2026, or up to $994.63 more than in 2025.
The report forecasts that meat prices will see the largest increases, rising between 5 percent and 7 percent, followed by restaurant food prices at 4–6 percent and vegetables at 3–5 percent, while other food categories are expected to increase by 1–4 percent.
Charlebois said beef prices saw a large increase in 2025 due to falling cow herd sizes and higher costs for feed due to droughts in Western Canada.
With more Canadians turning to chicken as a more affordable protein source than beef, chicken prices are set to increase “substantially” in 2026 due to underproduction.
Charlebois told The Epoch Times that food inflation in 2026 will be due to “structural pressures that have been building for more than a decade.”
“Even with slower overall inflation, Canadians should expect grocery bills to keep rising because the system itself has become more expensive to operate,” Charlebois said, adding that addressing bottlenecks in food processing and logistics will not stop food prices from rising.
Oh, it gets better:
While Ottawa debates affordability, defence spending and investment incentives, millions of Canadians are struggling with stagnant wages, weak unemployment benefits and growing economic insecurity, which is a disconnect economist Lars Osberg says is having serious social consequences.
“The big missing link is that we don’t have much of a social safety net in Canada,” the Dalhousie University economics professor said. “We haven’t had it for quite a while and we’re facing an enormous amount of economic insecurity and a long period of stagnant real wages.”
Osberg said the past year has been a roller-coaster, with uncertainty around jobs, trade and government policy. Some Canadians may have profited from this instability through investments, real estate gains or business opportunities arising from market volatility, but many households are under intense financial pressure, a reality masked by political talk of “affordability” that fails to address deeper structural problems, he said.
**
A quarter of Canadian students surveyed say they are so hard up they skip meals, says a Food Banks Canada report to the Commons human resources committee. MPs are studying youth unemployment including the impact of cabinet’s now-rescinded 2023 decision to let a million foreign students into the workforce: “Something is not working.”
**
Carney wants Canadians to believe businesses can somehow be taxed without those costs being passed on to consumers.
A recent poll suggests Canadians aren’t buying what Carney is selling.
That poll, from LĂ©ger, shows 85% of respondents believe industrial carbon taxes make their lives more expensive, because businesses will pass on at least some or most of the cost to consumers.
Digging deeper, 55% of respondents said they believe businesses pay little of the tax’s cost and pass the vast majority of it on to consumers.
Just 15% of respondents believe the government’s rhetoric that businesses bear the majority of the costs.
Back when he was running for Liberal leader, Carney said he wanted to make “the large companies pay for everybody.”
He relied on that same rhetoric to sell this fall’s federal budget, which calls for higher industrial carbon taxes.
Carney’s problem is that Canadians tend to rely on common sense.
They know carbon taxes on refineries make gas and diesel more expensive, which in turn makes it more expensive to drive to work and take the kids to school.
When carbon taxes drive up the cost of fertilizer and increase costs for farmers, food and groceries become more expensive.
Carbon taxes on utilities also make home heating and powering one’s home more expensive.
So, unless there’s someone out there who doesn’t drive, eat and need heat, they’re going to be hit by industrial carbon taxes.
That brings up another concern — keeping Canada’s businesses competitive.
Canadian businesses have been leaving for the United States in droves. Lower taxes, fewer regulations and lower utility costs, not to mention U.S. tariffs, are but a few reasons why so many businesses are choosing to head south of the border.
Industrial carbon taxes add yet another reason for companies to look south.
Why would a fertilizer plant, fuel refinery or steel plant want to come to or stay in Canada and face those extra costs?
U.S. President Donald Trump has been using tariffs and every other tool at his disposal to attract businesses away from Canada and encourage them to move south of the 49th parallel. Why is Carney on a mission to make Trump’s job easier?
Indeed:
🇨🇦 🚨#REVEALED: Moose On The Loose dug into @MarkJCarney ’s portfolio:
— wealthmoose (@wealthmoose) December 31, 2025
• 583 total holdings
• 🇨🇦 3 Canadian positions → ~0.5%
• 🇺🇸 530 U.S. positions → ~91%
So while Canadians get told that a 35% tariff will “protect jobs,”
91% of Carney’s own money is sitting comfortably… pic.twitter.com/ws6IejDtFD
Hint: he's not in it for you.
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