Canadians will get a first progress check on Prime Minister Mark Carney government's trillion-dollar plan under its new fiscal framework next Tuesday, Scotiabank.
The 2026 Spring Economic Statement will be tabled amid a highly uncertain global backdrop that only reinforces the case for Canada's ambitious investment-led strategy, noted the bank.
While near-term economic activity remains weak, a recovery should take hold as risks dissipate, stated Scotiabank. With inflation risk sidelining the Bank of Canada for now, the near-term burden shifts more squarely to fiscal policy, where preserving optionality may be the safer bet should downside risks materialize.
Despite a long list of headwinds, a stronger nominal growth profile may point to additional fiscal headroom in this update, it pointed out. That could open the door to additional spending, though Scotiabank assumes they would do so within the contours of the earlier deficit profile.
Debt ratios could look materially better under such a scenario, reflecting material historic gross domestic product revisions.
The update will land in a highly volatile market environment. Well-channeled fiscal activism combined with a bottom line that may not look materially different is unlikely to move markets in the near term, added the bank.
More important will be signs that the investment agenda is gaining traction as some investors may remain cautious on both execution and geopolitical risk.
Overall, the update is likely to be about maintaining momentum and sharpening delivery, while laying the groundwork for bolder steps in Budget 2026.