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.
Cut it out
Mike Holden, chief economist, and Alicia Planincic, director of policy and economics, Business Council of Alberta
Prime Minister Mark Carney wants Canada to build. But for that to happen, 2026 needs to be the year of cutting red tape. The country’s high regulatory burden has long held back business investment and economic growth, and it’s only gotten worse over time. Despite two separate red-tape reduction initiatives, the number of federal regulations is up 37 per cent since 2006 and has grown nearly twice as fast in recent years as in the U.S.
Mr. Carney is trying to change this. Every federal department and agency is reviewing regulations for inefficiencies, and a new Red Tape Reduction Office will oversee the process. But with no data beyond 2021, we don’t even have a clear baseline to measure the impact of this initiative. What really matters, though, is results. The review will only be meaningful if the regulatory burden actually declines. If it doesn’t, we’re not likely to reignite investment in Canada.
Take-home poverty
Gillian Petit, senior research associate, and Lindsay Tedds, professor, University of Calgary department of economics
Many people still think of poverty as something that happens when people don’t work. But the reality is different: The majority of people who live in poverty in Canada are working or live in families who work. Forty-two per cent of persons who live in poverty live in working poor families, i.e., families who work 500 hours or more in a year. The working poor outnumber those who are welfare poor, i.e., persons living in families who do not work much or at all, and who rely on social assistance. This challenges the misconception that poverty doesn’t happen to people who work and suggests that work alone is not enough to escape poverty in Canada.
If real progress on poverty is to be made in 2026, these numbers suggest that policy needs to focus on strengthening employment regulations, and encouraging employers to provide higher wages and better working conditions, including increasing minimum wages, as well as improving the adequacy and accessibility of income supports, particularly for persons with disabilities.
Who cares?
Rebekah Young, head of inclusion and resilience economics, Scotiabank
Ottawa is expected to keep its foot on the immigration brakes in 2026 as it works to rein in unsustainable population growth. By the government’s own projections, growth will slow sharply over the next two years as temporary resident numbers are pared back through a mix of departures and status transitions. The pivot toward an immigration plan anchored in economic potential is a step in the right direction. But the adjustment carries risks. Collateral damage could be most pronounced in sectors in which labour shortages are structural – particularly in care-related roles. Here, skill complementarity matters as much as competition. Earlier policy choices have left Canada ill-prepared for an aging society; an abrupt pullback now risks amplifying gaps in areas of high need.
For Canadian families facing sudden or chronic caregiving demands – whether for children, seniors or vulnerable relatives – the outlook for 2026 looks challenging. International hiring pathways remain closed, and temporary caregiver permits issued since 2023 account for less than 0.5 per cent of all temporary work permits (and under 2 per cent within the temporary foreign worker stream). Domestic hiring isn’t much easier. Processing times could run north of 311 days when government agencies’ individual guidance is stacked with an eventual permit likely stamped for just one year. That’s if you’re lucky: Mid-year ministerial briefings reveal caregiver processing times through pilot programs have nearly quadrupled, to a whopping 108 months (3,242 days), and those in processing limbo count in the tens of thousands.
Plan ahead, then think again. Care is critical – but in 2026, it’s also scarce.
Mitigating circumstances
Jennifer Winter, professor of economics, University of Calgary
There are a total of 335 active emission mitigation policies (announced and proposed) from governments across the country as of October, 2025, based on the Canadian Climate Policy Inventory.
These policies are a mix of mandatory actions (sticks) requiring compliance (e.g., regulations, emissions pricing); abatement support funding (carrots) by governments (e.g., subsidies, public procurement) to incentivize voluntary adoption of lower-emissions activities; and other supporting measures that do not directly incentivize abatement but may contribute to emission reductions.
Counting the number of policies does not measure their ambition, rigour or success, but it does inform us about the scope and breadth of government actions.
Sixty-nine (21 per cent) of the 335 are federal policies. B.C. and Quebec have the most subnational implementation of policies and tools, including the most mandatory policies. Adding federal policies more than doubles the number of active policies in B.C. and Quebec. Federal policies also account for most of the policies in other provinces and the territories.
The impetus for emission reduction by all orders of government is decidedly more carrot than stick. What will 2026 bring in terms of types of policies and their ambition?
Potholes ahead
Frances Woolley, professor of economics, Carleton University
Quebec’s roads are, on average, the worst in Canada. Ten per cent of urban municipally-owned roads in that province are so bad that they present a risk to public safety, and they urgently require major work or replacement. Another 18 per cent are rated as poor, or barely serviceable. Quebec is far from unique. In almost every province, at least 40 per cent of city roads are in fair, poor or very poor condition. Even in Canada’s richest province, Alberta, over half of urban roads have experienced significant deterioration.
All those potholes reflect a deeper problem: Canada’s road network is fiscally unsustainable. Cities’ existing revenue sources are insufficient to meet the cost of building and maintaining an ever-expanding road network. New York, Milan and London have addressed this fiscal imbalance through congestion charges. Toronto, Montreal and Vancouver should follow but are unlikely to.
Canada’s political system under-represents cities. Rural areas have far fewer people per riding than urban and, in most cases, suburban areas, giving them disproportionate say in provincial, federal and some municipal elections. Although city governments provide the goods and services that are fundamental to the quality of people’s everyday lives, they have neither the fiscal capacity nor the autonomy to do their jobs properly. This matters, because cities are the engines of Canada’s economic growth. If our cities don’t work, Canada doesn’t work either.
Zero chance
Brian Kingston, CEO, Canadian Vehicle Manufacturers’ Association
Zero-emission vehicle (ZEV) sales fell sharply in 2025, dropping by more than 50 per cent from 2024 levels. This collapse comes as federally mandated ZEV targets require increasing sales starting in 2026, culminating in 100 per cent ZEV sales in 2035. If ZEV sales don’t rebound, complying with the mandate, it could force automakers to pull hundreds of thousands of internal combustion engine and hybrid vehicle sales from Canada each year. An immediate course correction is required before the ZEV mandate drives consumers and the auto industry off a cliff.
Digital gauge
Viet Vu, manager of economic research, the Dais, Toronto Metropolitan University
The Canadian government is all in on AI. Such ambition is clearly seen in the appointment of the first AI Minister, in the more than 80 references to the technology in the 2025 federal budget and in the G7 Statement on AI on actions to accelerate AI in the public sector.
Yet, the reality facing the government is harsher. Over the past 20 years, the pace of digitization in the government has stalled, being surpassed by foes and friends alike in the United Nations e-government ranking, ending up at 47th place in 2024, down from 6th in 2003. If the federal government is serious about AI, it must be willing to make transformational investments that go beyond words to close the existing digital gap, before it can credibly talk about being at the forefront of government applications of AI.
Illustration by Matthew Billington
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
A housing-market horoscope for Canadians
Five charts to help follow fiscal and monetary policy
Stablecoins, AI and more trends on the market's mind
More economic insights from The Decibel podcast
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