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5 Things to Know Today — September 17, 2026

  Thursday, September 17, 2026  A historic Fed rate hike, Carney embracing EU associate status, a sliding TSX, oil pulling back from four-month highs, and a high-stakes vote in Newfoundland — here is what every Canadian needs to watch today. ITEM 1 OF 5 The Fed Raised Rates for the First Time in Three Years The U.S. Federal Reserve hiked its benchmark interest rate by 25 basis points Wednesday to a target range of 3.75–4.00%, defying public pressure from President Trump who had pushed for a cut. It marks the Fed’s first rate increase since 2023. Sixteen of eighteen FOMC officials signalled at least one further hike is likely before year-end. For Canadian markets, the ripple effects are real even though the Bank of Canada (still holding at 2.25%) does not move in lockstep with Washington. Higher U.S. Treasury yields, which have already pushed above 5%, pull Canadian government bond yields upward — and it is those bond yields, not the BoC’s overnight rate, that drive the 5-year ...
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Canada’s economy shrinks in Q3 amid export and consumer woes

 


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Canada’s economy shrinks in Q3 amid export and spending woes

Canada’s economy contracted by 1.1 per cent on an annualized basis in the third quarter of 2023, according to Statistics Canada. This was a much weaker result than expected by analysts and the Bank of Canada, which had forecast a slight growth of 0.1 per cent and 0.8 per cent, respectively.

The main factors behind the economic decline were a drop in exports, a slump in business investment, and a stagnation in consumer spending. Exports fell by 5.1 per cent, reflecting lower shipments of energy products, motor vehicles, and aircraft. Business investment decreased by 10.1 per cent, as firms reduced their spending on machinery and equipment, intellectual property, and non-residential structures. Consumer spending was flat, as households saved more of their income amid rising interest rates.

The only bright spots in the third quarter were government spending, which increased by 7.3 per cent, boosted by a one-time GST/HST credit payment, and residential housing investment, which rose by 8.3 per cent, driven by a surge in new construction.

The Canadian economy also performed poorly compared with the U.S. economy, which grew by 5.2 per cent in the same period. Canada has been more sensitive to the impact of higher interest rates, which have been raised by the Bank of Canada to 5 per cent from 0.25 per cent since early 2022. The central bank has recently signalled that it may pause or reverse its tightening cycle, as inflation has eased and economic growth has faltered.

Some economists believe that the third quarter contraction was a temporary setback and that the economy will rebound in the fourth quarter and beyond. Statistics Canada estimated that GDP grew by 0.2 per cent in October, indicating a modest recovery. However, others warn that the economy may face more headwinds in the new year, such as the ongoing supply chain disruptions, the spread of the new COVID-19 variant, and the uncertainty over the federal fiscal policy.

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