Quarterly economic outlook: Third quarter 2026

October 21, 2026

4 MIN READ

“We cannot change the cards we are dealt, just how we play the hand.” —Randy Pausch, The Last Lecture

The breakdown of Canada -U.S. trade talks in August marked a low point in the third quarter of 2026, and investors could be forgiven for thinking things just keep getting worse. While these are challenging times, unbridled pessimism is misplaced in our view.

First, the Canadian economy and financial markets have continued to demonstrate resilience. Second, the effective U.S. tariff rate, though higher since August, is still among the lowest globally, and the latest round of tariffs and countermeasures will hur t businesses and consumers on both sides of the border, not just those to the north. Finally, despite being dealt a tough hand on the trade front, Canada has some valuable cards to play in the current global environment. Hard times are creating opportuniti es to pursue a more productive and diversified national economy. While much of the work still lies ahead, the Carney government is pulling a diverse range of levers in its attempts to do so.

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