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Despite 2025’s rising costs, shifting trade dynamics and persistent inflation, Canadians responded to an unpredictable economy with resilience and creativity. Adjusting to a changing financial landscape meant rethinking how to spend, save and plan for the future.

As 2026 begins, many are looking ahead and wondering how the economic environment will evolve. �첥��Ƶ experts say there will be challenges, but point towards positive trends for the year ahead.

For instance, households and investors with keen eyes may find further opportunities to grow wealth this year.

Daniel Richards, an associate professor in the School of Administrative Studies, Faculty of Liberal Arts & Professional Studies (LA&PS), notes that even amid some geopolitical volatility, last year’s stock market returns were consistent and strong. That trend has carried into 2026, he says, noting “the news does not reflect what happens in the market.”

On a broader scale, Richards points out that contrary to expectations, the number of jobs in the economy increased at the end of 2025. This may suggest strength in the labour market and some support for household income and expenditures.

Irene Henriques, a professor of strategic management at York' University's and senior business strategist, also sees positives signs of support coming from the Canadian government. Activity in recent months has seen Canada foster resilience and opportunity through international engagement. “Canada’s push to diversify trade and deepen international partnerships is fundamentally about risk reduction and stability,” she says.

By spreading trade across a wider range of partners and supply chains, Canada can reduce its vulnerability to disruptions.

Other steps, such as Canada’s trade agreement with China on electric vehicles and agricultural goods, illustrate how diversified engagement can open new markets and ease trade tensions. “For everyday Canadians, this translates into more stable prices over time due to more resilient supply chains, stronger job security as Canadian firms get access to more export markets and long-term financial resilience which supports economic growth,” explains Henriques.

Meanwhile, the continued “buy Canadian” mindset among consumers is predicted to continue its positive impact throughout 2026. “Buying Canadian is not just symbolic; it has practical economic spillovers,” she says.

Spending at home keeps money circulating in local economies, supports jobs and strengthens small- and medium-sized businesses. Over time, this reduces reliance on volatile global supply chains and helps stabilize pricing and availability.

Businesses, she adds, are reinforcing this shift by expanding interprovincial trade and lowering internal barriers, making it easier for Canadians to buy and sell domestically.

Even with these encouraging signals, some uncertainty will shape the year ahead.

Greg Albo, associate professor in the Department of Political Science, LA&PS, suggests that economic unpredictability will continue to be fuelled by shifting global geopolitical tensions and changing trade dynamics – much like in 2025.

“It’s hard to suggest that this year will be any calmer than last year,” he says.

Renewed political and trade friction between the United States and the European Union has already surfaced in 2026, as well as volatility linked to instability in Venezuela and its effects on global energy markets. Albo says developments like these are leading to “international institutions predicting slower economic growth that’s lower than the last couple years,” with Canada’s GDP growth projected to remain in the low to mid single digits.

To maintain financial resilience, Canadians should prepare for the potential of ongoing inflation and the rising cost of living – especially for day-to-day staples. “Core goods have been running higher inflation than other items,” Albo says, noting this trend is expected to influence prices on essentials like food, transportation and education throughout the year.

That inflation will partly be driven by the impacts of last year’s tariffs, and survey data from Statistics Canada shows that many exporters and importers expect tariff-related cost pressures and higher selling prices in 2026.

According to Albo, Richards and Henriques, there are ways to navigate the unpredictable landscape ahead.

While it may be almost cliché, says Albo, careful financial planning and decision-making will be required. “Be a little bit more cautious on overall spending because of the general uncertainty – particularly if you’re personally leveraged,” he says.

In some cases, holding back altogether may be called for. Although the stock market has demonstrated positive momentum, Henriques suggests that for some, it may be best to wait to invest. “Holding cash or low-risk assets provides liquidity, optionality and psychological stability,” she says. “While it may limit upside, it also reduces downside risk during uncertain periods. For many households, that trade-off is rational, not fear-based.”

Preserving liquidity can also help bolster a suggestion from Richards: maintaining an emergency fund for unexpected costs or risks.

“If Canadians have that emergency fund, that bit of money set aside specifically for situations of sudden or urgent need, they can build financial resilience,” he says.

Richards also stresses the importance of understanding one’s financial situation and daily purchasing habits. “Really understanding how much everything costs, how much you’ve got coming in, how much you’ve got going out – that daily budgeting tool is a key part of financial resilience,” he says.

And, Canadians are adopting these measures, Richards says, noting that 2025 saw an increase of Canadians seeking fee-for-service financial planners.

“People are realizing that financial advice is not just about what investment/product you are recommended, but more about how you apply strategies and organize your finances,” he says.

Financial planners can offer expertise and professional guidance for reviewing budgets, tracking expenses and developing strategies for handling rising costs and uncertainty.

Lastly, Henriques suggests that if Canadians do have to spend money, they should consider spending their dollars at home. She urges households to explore purchasing possibilities across the country.

“When Canadians explore new domestic businesses, local services or emerging sectors, their spending supports innovation and competition which improves quality and value; helps new ventures scale creating jobs and alternatives to larger firms; and keeps economic momentum thereby preventing a slowdown driven purely by caution,” she says.

Though challenges, uncertainty and caution may be ahead, it does not mean Canadians need to feel hopeless. “When presented with a problem, if enough focus and attention is given to it, a solution will emerge,” says Richards.

For Henriques that solution lies, in part, in a slight – but positive – rethinking of what the story of 2026 will be for most Canadians.

“In the end, Canada’s economic story right now isn’t about rapid growth but about resilience, smarter choices and positioning households and businesses to emerge stronger once uncertainty fades,” she says.

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