The Parliamentary Budget Office cut its real GDP growth forecast to 0.9% for 2026 and 1.5% for 2027, down from 1.1% and 1.6% in June, amid new U.S. tariffs and Canadian countermeasures after trade talks broke down in late August. It now projects a $63.3 billion deficit for fiscal 2026-27, peaking at $70.2 billion in 2027-28, with deficits averaging $3 billion a year higher than in June. The debt-to-GDP ratio is expected to rise steadily over five years, and the PBO assumes the Bank of Canada will start raising its policy rate in early 2027 to 2.75% by midyear. Annual inflation is seen averaging 2.8% in 2026 before easing to 2.4% in 2027.
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| Market | Currencies |
|---|---|
| Close on 10/19/2026 | 1.41108 |
| Change that session | -0.20% |
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