As this author has for several years, I will once again be taking a stab at some of the major issues that will be important for Canada during the next year. While thinking about what this column should include over the last week or so, this past weekend has blown that all out of the water with the American actions in Venezuela and massive protests in Iran. These are both very positive developments for freedom and weakening terrorists at first blush, but they are also very complex issues that could end up more negative than positive. So, attempting to predict the main themes for Canada in 2026 will be especially challenging, but well worth attempting. As in previous years, I will revisit these predictions at year-end to see how right or wrong they were.
Prediction #1: Trade negotiations with the U.S. and Mexico under the USMCA/CUSMA will be a key priority in 2026, and it is very important to Canada to get a deal. Although there have been discussions about U.S. President Donald Trump scrapping the whole thing and possibly attempting to reach separate deals with Mexico and Canada, that is not the likely scenario as the U.S. benefits greatly from the current agreement and the three economies have been highly integrated for years. The three most sensitive issues for the U.S. with Canada are supply management in the dairy and poultry industries and the two pieces of legislation involving internet content, the Online News Act and the Online Streaming Act. Given political realities, supply management is unlikely to disappear but more U.S. dairy products will be permitted into Canada. This will antagonize the dairy and poultry industries, which will likely be given some offsetting subsidies even though these are very profitable sectors. As for the two internet bills, there will probably be some watering down of their terms or replacement with tax credits or other means to benefit the Canadian cultural industries. Ironically, the vast majority of Canadians would benefit from having all three of these policies completely eliminated. The Trump administration will also leave some tariffs in place for the medium-term, at lower levels than they are at present. From the perspective of the business community in Canada, the preferable outcome is a continuation of the current USMCA/CUSMA to the maximum extent possible. It is unfortunate that Prime Minister Mark Carney has carried on with Trudeau’s habit of making derogatory remarks about the U.S. President (such as his recent “who cares” comment about when he last spoke to Trump), as that surely cannot help the trade negotiation process.
Prediction #2: With respect to the economy, another year of very minimal economic growth in Canada is probable and a recession possible. Canada is currently experiencing stagflation, where growth stagnates but inflation remains high. Inflationary pressures mean that the Bank of Canada will be hesitant to reduce interest rates further, although that would be welcome to stimulate the economy. Food inflation is expected to be especially problematic for structural reasons in the industry as well as a low dollar, and the continuation of policies such as the industrial carbon tax will boost overall inflation rates. Carney has said he plans to retain problematic policies such as the industrial carbon tax, the Impact Assessment Act (no pipelines bill), increased methane regulation, the tanker ban and emissions cap, except in certain special circumstances. If he does, there is every reason to believe the investment exodus from Canada and a continued decline in Canadians’ standard of living will continue in 2026.
Prediction #3: There will be no federal election in 2026. Although it was rumoured for months that Carney wanted to have another election in Spring 2026 in the hopes of obtaining a majority government, the fact that he is currently close to a majority because of two MP floor-crossings will dampen interest in an election. It also appears that Carney’s honeymoon period is over and the opposition Conservatives have rebounded in the polls. As a result, an election would be a very big gamble for the Liberals and Canadians would likely punish them for holding yet another election so quickly after the last one. The fact that the Liberals only need to count on one or two votes from opposition parties on any given topic means that the Liberals can govern more or less as if they had a majority government, possibly for a four-year term. This wasn’t what Canadians voted for.
Prediction #4: Trump will lose his majority in the House of Representatives, and possibly also in the Senate in the mid-term elections in November 2026. This will end Trump’s ability to make significant legislative changes. Another very important milestone in 2026 will be the US Supreme Court’s decision on whether Trump had the legal authority to impose the tariffs he has levied on countries around the world without Congressional approval. This decision by the Court is expected in early 2026, and my prediction is that the Supreme Court will rule in Trump’s favour even though the legal case is very shaky.
Prediction #5: The ridiculous Electric Vehicle (EV) mandate will be significantly watered down in Canada this year and could disappear completely. Even the European Union, with all of its absurd and expensive “green” policies, has recently weakened its EV mandate by shifting from a complete ban on internal combustion (ICE) vehicles by 2035 to a more flexible arrangement allowing for hybrids and even some clean ICE options.
There are about a million other issues that we could cover, but I’ll leave it there for now. If you liked 2025, you will really love 2026 as it promises to be even more chaotic. The major international events taking place in Venezuela and Iran currently have the potential to be real game changers in a positive way, restoring freedom to people that have been oppressed by brutal regimes for decades, boosting their economies and weakening forces of terrorism globally. The world could really use some good news these days. Fingers crossed.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
