Canada

Research evidence excerpt

Canada

Michael S Hanson (1-212) 622-8603 North America Economic Research J P M O R G A Nmichael.s.hanson@jpmchase.com

JPMorgan Chase Bank NA 17 July 2026

Bennett Parrish (1-212) 622-9003

bennett.parrish@jpmchase.com

JPMorgan Chase Bank NA

Canada vate-sector study offers a more sobering assessment of how

they are adjusting: 42% said they have either already relocat-

• The BoC held rates steady with a more upbeat outlook ed production to the US or are considering doing so—with

most (77%) planning to do so within two years.

• Continued weak growth risks likely extend this hold

• June CPI: softer headline — and core subdued Moreover, 57% report they have either scaled back capex or

cancelled projects altogether due to the trade uncertainty.

This week’s steady policy stance by the Bank of Canada was

Another 42% have paused or scaled back R&D spending.

not surprising, but newfound optimism concerning the out-

These actions are understandable, but they are likely to con-

look was conspicuous— especially as risks remain elevated.

tribute to sluggish growth well into next year in our view. In

Near-term, the BoC revised down its 2Q headline inflation

addition, lost investment will very likely weigh on the under-

forecast to 2.6% (from 3.0% in the April MPR) on the sharp

lying pace of growth and productivity. It remains difficult to

decline in energy prices through the end of June. The 2Q

see the case for tighter monetary policy in this scenario.

growth forecast was lifted to 2.5% (from 1.5%), as expected

growth from 1Q—revealed to be a small contraction—was

merely delayed to last quarter. Overall, core inflation for this Core to stay subdued in June

year was unchanged at 2.2%, while growth was revised down Returning to the near-term inflation outlook, next week we