Today’s take for July 15, 2026
The story: The Bank of Canada is remaining cautiously optimistic, which is more than a lot of us can say. Today it released its mid-year monetary policy report, a look back on 12 months of pretty muted growth in the Canadian economy, while also forecasting better days ahead. Growth picked back up to a modest 2.5% in Q2, the report said, and is expected to decline again before evening out at 1.8% for 2027 and 2028. Inflation, meanwhile, had been sitting at a nice 2% until Trump launched the US-Iran war, sending gas prices soaring and raising Canada's CPI to 3.2%. The BoC chose to hold its interest rate at 2.25% for the sixth time in a row – it's is confident in its predictions, but stressed that risks to the forecasts abound.
Why it matters: Ever since Trump’s tariffs sent the Canadian economy haywire, our country's growth has been tepid at best, and yet Trump's other gift, the US-Iran War, has sent gas prices soaring. That puts the BoC in a hard place, as governor Tiff Macklem acknowledged in a press conference today. “Monetary policy has been facing this dilemma,” he said. “You can’t at the same time raise rates to lower inflation and lower rates to raise growth.” Suitably stumped, the bank has chosen to hold steady, cross its fingers, and hope for the best.
What this means…
- For investors: A sign that Canadian businesses aren’t dead yet. Macklem noted that despite Trump’s trade war threats, many of our exporters have adjusted to the new normal and are finding ways to navigate the uncertainty. Meanwhile, American buyers are still enthusiastic for Canadian goods and services, especially with the US economy doing well – in Macklem’s estimation, at least.
- For consumers: Pain at the pump, but hopefully nowhere else. Macklem pointed out that while gas prices have jumped, inflation has held steady in the rest of the economy. The bank expects that to continue, as slack in the rest of the economy discourages businesses from raising prices.
- For the economy: Good news (with many asterisks)! That 1.5% growth isn’t fantastic, but it’s better than the nothing we’ve seen since the tariffs. That number depends on many things, however. The bank said that persistently high oil prices could cause inflation to break containment, spreading from gasoline prices to the rest of the economy. That, in turn, could prompt the bank to raise rates again, hampering growth even further.
Bottom line: If there’s one thing that’s crystal clear from Macklem’s remarks, it’s that Canada’s fate isn't entirely in its own hands. Now more than ever, our daily realities are reflections of whatever the US decided to do today, whether that’s tariffs or foreign wars. And while the Carney government is trying to spur growth through major domestic projects, BoC senior deputy governor Carolyn Rogers said they're still too far out to have a meaningful impact on the economy yet. For now, if you want to know your own backyard, follow the global news.
The Wrong Question
The headline: Leading AI models may display more Canadian values than American, says study
- Everyone's asking: Does AI act Canadian?
- The better question: What do you mean by 'Canadian,' exactly?
Why it matters: Transformer Lab, a Toronto AI company, tested five major language models against the World Values Survey and found that on topics like immigration, national pride, and trust in government, they leaned closer to Canadian public opinion than American. Transformer Lab founder Ali Asaria claimed those results amount to “Canadian bias" in AI. But before anyone starts yelling about “woke AI,” even Asaria walked that claim back a bit, telling The Logic that what they're describing as 'Canadian' attitudes might actually just be "wealthier, highly educated Western populations," a group Canada happens to have more of per capita than the US does. So instead of AI skewing Canadian (it's not exactly talking about goin' out for a rip and smokin' a dart, is it?), the results could be pointing at class. If AI is trained to read affluent, credentialed, institution-trusting users as 'patriotic' instead of just 'rich and educated,' the industry has some reckoning to do about whose values are actually guiding these models.
The Number
0.5%
Context: Statistics Canada's latest manufacturing sales report shows a record $78.1 billion for May – that’s up 1.3% from April. The auto sector did most of the heavy lifting, with vehicle sales seeing an 11.8% jump to $4.6 billion in just one month. However, that 1.3% is a current-dollar figure, so it's measured at today's prices and not adjusted for inflation. If you do make those adjustments, sales actually rose by only 0.5%.
What it actually means: Picture a factory that sells 100 cars for $30,000 each in April, and then in May they sell another 100 cars, but this time for $33,000 each. Sales look like they jumped 10%, but the factory didn't actually make or sell any extra cars – everything just cost more. That's basically what's happening here, and StatsCan’s June jobs report shows that manufacturing is actually down 61,000 jobs since January 2025. It might have been a record month, but it’s way too soon to call this a comeback.
