Event4 June 2026Document

PBO's June 2026 Economic and Fiscal Outlook treats current US tariffs as permanent and projects growth of 1.1% in 2026 and 1.6% in 2027

The Parliamentary Budget Officer published its Economic and Fiscal Outlook on 4 June 2026. Assuming that the US tariffs and Canadian countermeasures in place as of May 2026 persist, it projected real GDP growth of 1.1% in 2026 and 1.6% in 2027, down from 1.3% and 1.8% in its September 2025 outlook, and said business investment continues to lag as firms postpone expansion plans. It projected federal deficits averaging about $64 billion a year over the next five years, declining to $58.2 billion by 2030-31. The PBO said higher nominal GDP reflects elevated commodity prices rather than stronger real economic activity.

Date

4 June 2026

Kind

Other

Where

Canada

Evidence

Document: An official document: a bill, a filing, an agreement text. How evidence is weighed

Who

Parliamentary Budget Officer (acted)

Sources

• Parliamentary Budget Officer, “Economic and Fiscal Outlook – June 2026” (external site), 4 June 2026. source record

Claims that rest on this event

• ComplicatesOutcome

  On the current course, intended or not, both countries win from Canada's resource build-out. The US gets more supply, and the new southbound capacity arrives first, from 2027. Canada gets a bigger resource base and the capacity to sell elsewhere, which shifts bargaining power toward it.

  The PBO projects only 1.1% growth in 2026 while treating current US tariffs as permanent: no sign yet of a net gain for Canada.

• SupportsMechanism

  Official forecasts show no boom (about 1.1% growth in 2026, from Finance Canada and the Parliamentary Budget Officer), and much of the record foreign direct investment in 2025 was takeovers and reinvested earnings rather than new investment.

  The Parliamentary Budget Officer projects real GDP growth of 1.1% in 2026 and 1.6% in 2027, an official forecast with no boom.

• ContextOutcome

  On the current course, intended or not, Canada's resource build-out pays for both countries; the trade war doesn't. The US gets more supply, and the new southbound capacity arrives first, from 2027: it gets more supply either way; counted as income, the build-out pays it a little, but the trade war costs it more, so it comes out ahead in 2034 only if nearly all of today's tariff damage is gone. Canada gets a bigger resource base and the capacity to sell elsewhere, which shifts bargaining power toward it. By 2034, Canada comes out ahead unless most of today's tariffs are still in place; but the decade as a whole leaves it behind, and the longer the tariffs last, the less of it comes back.

  Official forecasters treat today's tariffs as permanent; on that assumption our model has Canada ahead in 2034 in about 15% of runs.

How it bears on the outcome