There will not be a Twenty-Four tomorrow, September 30, as we observe the National Day for Truth and Reconciliation. ATB is committed to adopting a reconciliation framework to support the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and advance the TRC's 94 Calls to Action; learn more here.

For timely reading, we recommend revisiting the report From Readiness to Reach: Indigenous Trade, Partnership and Economic Growth in Alberta from this past spring, which was published seeking to fill a critical knowledge gap: understanding how Indigenous entrepreneurs in Alberta participate in, and are affected by, trade.

Key points

• After strong growth in the previous three months, Canada’s economic output was flat in July.
• The advance estimate for August points to a modest increase.
• With new tariffs hitting the economy, output growth is likely to decelerate over the last three months of the year.

The Canadian economy had a growth spurt in the spring, but output stalled in July as reduced output in the retail, wholesale, manufacturing, and mining and oil and gas sectors pulled down overall growth. The construction sector was a bright spot with its output up by 1.3% in July.

Although the advance estimate shows a 0.2% rise in August, the drag from new tariffs—plus an outright U.S. ban on about $1.6 billion worth of Canadian alcohol, dairy, and motorcycles that just took effect—are likely to slow growth in the fourth quarter despite government support aimed at businesses and workers affected by the tariffs. Higher long-term interest rates will also weigh on the economy this fall.

This trajectory is in keeping with our most recent forecast for an annual increase in national GDP of just 0.9% this year followed by a stronger showing of 1.5% in 2027 as businesses adapt to the trade disruptions.

As of its July forecast, the Bank was expecting GDP growth of 0.7% in 2026 followed by 1.8% next year.

Less exposure to U.S. tariffs combined with ongoing population growth and activity across a diverse range of sectors, including oil and gas, puts Alberta on track for an annual rise in real GDP of 2.6% this year, far outpacing the national average, before moderating slightly to 2.3% in 2027.

Today’s GDP report does not provide a provincial breakdown, but—despite the month-over-month pullback in oil and gas extraction output—strong year-over-year growth in the national oil and gas economy continues to bode well for the Alberta economy this year.

Implications for the Bank of Canada

Today’s GDP by industry numbers for July and the advance reading for August are likely to keep the Bank of Canada on hold until next year when the economy is expected to be in somewhat better shape. We see the Bank raising its policy rate to 2.75% by the end of next year—reaching the mid-point of the neutral range. This assumes, however, that the inflation side of the equation does not get so high that the Bank feels it has to raise rates earlier or higher in response. In that regard, the Bank is still very much in “wait-and-see” mode.

Answer to the previous trivia question: As of the second quarter of 2026, Newfoundland and Labrador was the province with the highest retail sales per capita.

Today’s trivia question: The Toronto Blue Jays finished in what place in the American League standings this year (they were first in 2025)?