Canada survived Year 1 of the second Trump presidency mostly intact economically, and fully intact sovereignly. What about Year 2? For this series, The Globe asked dozens of economists, analysts and investors to pick a chart they think will be important in 2026. Explore some of the other topics in the index below.
Long time running
Robert Kavcic, senior economist, BMO Capital Markets
When we called the housing correction at the start of 2022, we argued that it would be measured in years, not months or quarters. That thesis was built on the fact that almost all factors that could push home prices higher were doing so at the same time, leaving nowhere else to go but down.
Real borrowing costs were deeply negative and have since normalized; speculative price growth expectations have been erased; millennials continue to age out of their first-time home-buying years; and torrid international immigration has been replaced by harder caps. The long process of resetting valuations, from affordability and investment perspectives, is now well under way … and not quite done yet.
Household game
David Doyle, head of economics, Macquarie Group
For the past 30 years, Canada’s housing stock has increased roughly in line with household formation. Projections suggest a change in the years ahead. The federal government’s immigration policy implies zero household formation over the next two years, even as housing starts and completions have ramped up. Assuming the federal government sticks to its plans, the imbalance will become more pronounced and corrected by some combination of a) a decline in construction activity and cancelled projects, and b) a restoration of housing affordability through price declines and income growth.
We would see such developments as positive for Canada’s long-term growth prospects as private capital shifts away from residential construction and housing speculation, and toward more productivity-enhancing projects.
Start me up
Bradley Saunders, North America economist, Capital Economics
Construction of build-to-rent (BtR) properties has soared in recent years, with developers benefitting from strong demand amid surging immigration, as well as financing assistance made available through federal housing schemes designed to boost the stock of rental properties in the largest cities.
While immigration flows have collapsed more recently, cheap financing is sustaining the upward trend, with BtR starts surpassing starts of new homes and condos combined for the first time on record in the third quarter (see chart), despite rent growth being negative at the national level in recent months. Indeed, the CMHC estimates that 88 per cent of BtR projects benefitted from a low-cost apartment construction loan or loan insurance program in 2024.
We think this surge in starts has a little further to run given that Prime Minister Mark Carney has largely left his predecessor’s housing policies untouched since entering office, and we expect the Bank of Canada to cut interest rates further than is currently priced into markets, which would also help developers with financing. The drag on rent growth from lower immigration will remain a key headwind, though.
Inventory overload
Bryan Yu, chief economist, Central 1 Credit Union
On the housing front, we are following the state of the country’s two-speed market. Large and pricier markets such as Vancouver and Toronto continue to struggle with low sales and declining prices, while other parts of the country exhibit near-record prices owing to affordability differences and economic uncertainty.
We expect modestly stronger market conditions in 2026, but stabilization in prices will require a decline in resale inventory and in the number of new and unoccupied units – both of which have ballooned and contributed to downward price pressures. Stabilizing inventory will put a floor on prices and support developer and presale confidence, which will be required to get more projects built in coming years to limit a future supply crunch.
The rental wave
Ben Rabidoux, founder, Edge Realty Analytics
Canada is quietly undergoing an unprecedented rental construction boom. Nearly 180,000 purpose-built rental units are currently under construction nationwide – enough to lift the existing rental stock by more than 7 per cent as they complete. Every province will see meaningful supply growth, but the surge will be most pronounced in B.C., Alberta and Atlantic Canada, each of which is on track for double-digit increases in rental inventory over the next couple of years. This supply wave is arriving just as the federal government expects national population growth to slow to near zero through 2028.
Against that backdrop, it’s entirely plausible that Canada’s rental vacancy rate – now 2.3 per cent according to the Canada Mortgage and Housing Corp. – could climb to levels last seen in the early 1990s, potentially even approaching an unprecedented 5 per cent nationwide.
As affordable as it gets?
Robert Hogue, assistant chief economist, RBC Economics
Interest rate cuts and falling prices in Toronto, Vancouver and Calgary have lowered the costs of owning a home in Canada since early 2024. However, any further improvement in affordability will be slim, with the Bank of Canada likely to hold interest rates steady through 2026. This would continue to leave many Canadians in a far tougher position to be able to buy a home than before the pandemic. We expect housing demand to recover only gradually in the year ahead. Sharply lower immigration will create some turbulence.
Goods grief
Arlene Kish, director, S&P Global Market Intelligence
The 2025 federal budget tabled by Prime Minister Mark Carney’s Liberals was chock full of initiatives that would help lift industries subject to high U.S. tariffs, particularly in manufacturing. Tariffs have already altered supply chains, leading to declines in industrial production with lost manufacturing capacity, which were mostly felt within the auto sector. This led to manufacturing job losses. Mr. Carney’s visits outside the U.S. are laying the foundation for growing and securing investment and trade deals that have the potential to double non-U.S. trade over the next decade.
It also highlighted that new home building will have to ramp up between 290,000 units to a maximum of 480,000 units per year through 2035 to bring affordability down to 2019 levels. The government plans to build homes using “a more productive home building industry with fewer barriers and less red tape.” In the broader sense, greater productivity implies less labour may be used to increase output.
Construction and manufacturing job vacancy rates are near historical lows amid weak demand. Survey data show that firms report fewer labour shortages and slow investment spending. Based on these headwinds, labour demand within the goods-producing industries will be soft in the near term.
2026 in charts: The full series
The economy and investment, in 14 points
A guide to Year 2 of the Canada-U.S. trade war
What’s ahead for the job market and household spending
Five charts to help follow fiscal and monetary policy
Seven policy points to remember as Carney presses Canada to build big
Stablecoins, AI and more trends on the market's mind
More on housing from the Stress Test podcast
The era of record-low interest rates is over. What will that look like for homeowners in 2026? The Stress Test podcast asked a licensed mortgage agent and a Toronto millennial questioning how to manage higher costs.