Economic Indicators (Source: Scotiabank)
The BoC Will Welcome a Surging Domestic Economy
Feb 27, 2026
My instant reaction in client-focused chat rooms upon seeing these numbers was that they were much better than expected because of the details. Headlines dwelled on the GDP contraction of –0.6% q/q at a seasonally adjusted and annualized rate (SAAR). That placed emphasis upon the wrong thing from a Bank of Canada standpoint. Markets generally understood the points that followed because there was very little reaction in bonds and CAD.
Key is that final domestic demand was strong which adds consumption plus investment plus government spending. That was up by 2.3% q/q SAAR in Q4 for the strongest gain since 2025Q2 (chart 1). It’s a better gauge of strength in the domestic economy over which monetary policy has greater influence.
What explained the gulf between GDP and FDD? The biggest inventory drawdown in three years. Inventories drove a whopping 4.2 percentage point drag on GDP growth which is the biggest inventory drawdown effect since 2022Q4 (chart 2). Therefore, chart 3 provides a misleading depiction of what’s going on in the Canadian economy.
What drove FDD? Chart 4 breaks things down ....     More >>

Featured Insights (Source: RBC Financial Group)
Decades of trade disputes reshape Canada’s softwood lumber sector
Feb 25, 2026
Canada’s softwood lumber dispute with the United States remains a long-standing disagreement characterized by successive rounds of trade measures over multiple decades, but the latest duties have increased challenges for major producing provinces already contending with structural headwinds in their forestry sectors.
Anti-dumping and countervailing duties, and now additional tariffs on softwood lumber and derivative wood products add to a long history of trade measures applied to Canadian exports.
Beyond the immediate impact on exporters in provinces such as Quebec and British Columbia, sustained production curtailments risk cascading pressures on downstream industries reliant on Canadian lumber as a key input.
Still, these challenges could also create opportunities for strategic repositioning.
Latest dispute follows a long paper trail
At core of the dispute is U.S. authorities alleging that Canadian stumpage fees (fees paid to harvest timber on crown land) effectively function as a subsidy, allowing Canadian lumber to be sold at below-market prices.
In Canada, roughly 94% of lumber comes ....     More >>

TD - The Weekly Bottom Line - Feb 27, 2026
Canadian Highlights
- Capital spending intentions for 2026 flagged a pick-up in nominal private sector investment, alongside continued growth in the public sector.
- Canadian GDP contracted 0.6% annualized in the fourth quarter, thanks to an inventory draw down. Beneath the headline, domestic demand and net trade were much healthier.
- The solid details of the GDP report likely left the Bank of Canada comfortable with its current on-hold stance.
U.S. Highlights
- President Trump focused on tariffs and cost of living issues in his State of the Union Address.
- Consumer confidence edged higher in February on improved expectations, but views of current conditions weakened further as labor market pessimism persisted.
- Mortgage rates fell below 6% for the first time in over three years, offering modest support to the housing market.