Interest rates may decline again this year, Krishen Rangasamy, principal economist with FCC, said at its 2026 Economic Outlook.
“I understand that what we’re saying here is quite different from consensus on interest rates, because most forecasters are predicting either no change to the overnight rate or even an increase later this year,” he said.
“That may well be the right forecast if the economy picks up materially. But … we think economic growth will weaken this year and if we’re correct about that, additional stimulus by the central bank should not be ruled out.”
He expects U.S. tariffs to remain high and said Canadians should do more to take advantage of trade agreements with countries other than the United States.
He also said some Canadians are not taking advantage of tariff-free status contained in the Canada-U.S.-Mexico trade agreement and are paying a Trump-announced tariff on expots to the U.S.
He said it’s due to confusion over rules of origin requirements.
“Remember that the majority of our exports to the U.S. is tariff-free thanks to CUSMA, and yet, outside of the energy sector, our exporters have really struggled since the U.S. tariffs were imposed,” he said.
“Over the last eight years (EU) exports grew by 40 per cent to Canada. Our exports to the European Union have barely budged over that eight-year period,” he said. “So we’re struggling to even take advantage of the trade deals we’ve got already.”
