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The Bank of Canada left its policy rate unchanged at 2.25%, matching market expectations and remaining in line with the previous reading. The hold suggests policymakers are still comfortable keeping rates steady for now, likely as they assess the balance between easing inflation and softer growth. The decision itself was fully expected, so the market focus will remain on the bank’s guidance for the next move.

Source: Bank of Canada

Canada’s January capital-flow data showed a sharp rebound in foreign demand for Canadian assets. Foreign securities purchases surged to C$46.73 billion, far above the C$4.72 billion expectation and a major turnaround from the previous C$5.84 billion outflow. At the same time, Canadian purchases of foreign securities came in at C$11.390 billion, down from C$13.060 billion previously. The figures suggest overseas investors returned aggressively to Canadian markets, while outbound investment by Canadians softened slightly.

Source: Statistics Canada

Canada’s latest data delivered a mixed but overall softer macro signal. Housing starts rose to 250.9K in February, beating the 243.0K forecast and improving from 240.1K, showing resilience in residential construction. On inflation, the monthly picture was firmer, with CPI rising 0.5% MoM after 0.0% previously, although still below the 0.7% forecast, while Core CPI MoM accelerated to 0.4% from 0.2%.

The broader annual trend, however, pointed to easing price pressure. Headline CPI slowed to 1.8% YoY from 2.3%, while Core CPI eased to 2.3% from 2.6%. The Bank of Canada’s preferred underlying measures also softened, with Common CPI at 2.4% from 2.7%, Median CPI at 2.3% from 2.5%, and Trimmed CPI at 2.3% from 2.4%. Meanwhile, new motor vehicle sales fell to 114.4K from 127.3K, suggesting some softness in consumer demand. Overall, the data supports the view that inflation is cooling more clearly, even as monthly price momentum and strong housing activity keep the policy picture from becoming fully one-sided.

Source: Statistics Canada; Canada Mortgage and Housing Corporation (CMHC)

Canada’s industrial pulse softened at the turn of the year. Capacity utilization slipped to 78.5% in Q4 2025 from 78.9% in Q3, while manufacturing sales fell 3.0% month-on-month in January 2026, reversing the 0.4% gain recorded previously. Statistics Canada said the drop in factory sales was driven mainly by weaker activity in the transportation equipment and machinery subsectors. The combined message is that Canada’s production side entered 2026 on a softer footing, with both factory output demand and overall industrial capacity use losing momentum.

Source: Statistics Canada, Industrial capacity utilization rates, fourth quarter 2025; Monthly Survey of Manufacturing, January 2026.

Canada’s labour market weakened sharply in February, with employment falling by 84,000 and the unemployment rate rising to 6.7% from 6.5% in January. The participation rate also edged down to 64.9%, while Statistics Canada said the decline was concentrated in full-time work, which dropped by 108,000. The data point to a softer start to the year for Canada’s job market after weakness had already appeared in January.

Source: Statistics Canada, Labour Force Survey, February 2026.

Canada’s January data painted a divided macro picture. Building permits rose 4.8% to C$13.3 billion, but wholesale sales fell 1.0%, while the merchandise trade deficit widened to C$3.6 billion from C$1.3 billion in December. Statistics Canada said exports fell 4.7% to C$62.5 billion and imports slipped 1.1% to C$66.1 billion, suggesting external demand and wholesale activity softened even as construction intentions improved.

Source: Statistics Canada.

Canada’s Thomson Reuters IPSOS PCSI rose to 49.37 in March from 47.46 previously, showing a noticeable improvement in consumer sentiment. Even so, the index is still recovering rather than surging, which points to a better tone but not a full confidence rebound.

Source: Thomson Reuters/IPSOS.

Canada’s Ivey PMI (Feb) surged to 56.6 (vs 51.1 expected; 50.9 prior), signalling a clear acceleration in overall business activity. The non-seasonally adjusted reading also rose to 56.3 (prior 47.0), reinforcing the improvement.

Source: Ivey Business School / Ivey PMI

Canada’s total reserve assets (Feb) edged down to C$128.1B (prior C$128.7B). Labor productivity (Q4, q/q) came in at -0.1% (in line with expectations; prior +1.1%), pointing to a stalled productivity pulse into year-end.

Meanwhile, S&P Global Services PMI (Feb) printed 46.5 (prior 45.8), improving slightly but still deep in contraction.

Source: Bank of Canada; Statistics Canada; S&P Global

Air Canada said it has suspended all flights to and from Tel Aviv (TLV) and Dubai (DXB) due to the military situation in the Middle East, with service currently set to restart on March 23, 2026 (i.e., flights canceled up to March 22). The airline told affected passengers not to go to the airport, and said customers can change flights free of charge (or receive a full refund if they cancel, per the options shown in its advisory).

Source: Air Canada (Travel News & Updates).

Canada’s S&P Global Manufacturing PMI (Feb) rose to 51.0 from 50.4, extending the move above 50 and pointing to a modest improvement in factory conditions.

Source: S&P Global

Canada’s federal budget balance moved into surplus in December, a notable improvement from the prior month’s deficit.

• Budget Balance (Dec): 0.20B (prior -8.02B)

Why it matters: a swing into surplus can modestly improve fiscal optics, though month-to-month budget figures can be seasonal and volatile.

Source: Department of Finance Canada