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Scotiabank Provincial Outlook 2026: Growth Slows, But Canadian Provinces Stay Steady Through 2027
According to the latest Scotiabank Provincial Outlook 2026 report, growth across most provinces cooled in 2025 after stronger momentum built through 2024. Why the slowdown? Trade shocks, ongoing uncertainty, and reduced immigration inflows also affect consumer demand and housing needs in some regions.
Still, the bigger picture stays positive. Canada is adjusting, and provinces are responding with investment plans, housing measures, and policy moves that could bring stronger support from 2027 onward.
Scotiabank Provincial Outlook 2026: What Is Driving the Slowdown
The report points to a few clear forces that shaped 2025 and will influence 2026: Trade headwinds remain real. Some US tariff measures still affect key sectors like steel, aluminum, and autos. The impact varies widely by province. Business spending has been cautious. Uncertainty is lower than earlier in 2025, but firms are still careful about new expansion decisions.
- Population growth has slowed. With fewer newcomers compared to recent peak years, demand softens in areas that saw very high inflows of international students and other nonpermanent residents.
- At the national level, the outlook expects Canada’s growth to ease from about 2 percent in 2024 to about 1.6 percent in 2025, then around 1.5 percent in 2026, before improving to around 2 percent in 2027.
Which Provinces Look Stronger and Why
One key takeaway from the Scotiabank provincial outlook 2026 is regional divergence.
- Western Canada is positioned to grow faster than the national average. A big reason is lower effective tariff rates on many western export baskets, plus steadier population trends in the Prairies.
- Ontario and Quebec are expected to see the slowest growth. These provinces have higher exposure to impacted trade sectors, plus they are more affected by recent shifts in immigration related population growth.
- Atlantic Canada is expected to track around the national pace. Lower tariff exposure helps, but slower long-run potential growth keeps the pace moderate.
Here is a simple snapshot of how the report frames provincial positioning.
| Region | What helps | What weighs |
| Western provinces | Lower tariff burden, stronger Prairie population growth | Global uncertainty, commodity price swings |
| Ontario and Quebec | Large consumer markets, integrated supply chains | Higher tariff exposure in key sectors, slower population growth |
| Atlantic provinces | Lower tariff exposure, housing activity in some areas | Slower interprovincial inflows, lower long run potential growth |
Households, Housing, and Jobs: What the Report Signals for 2026
Household spending held up better than many expected in early 2025. But the report suggests consumption growth is now cooling in many provinces. Why? Slower population growth reduces the base level of spending, and trade-related cost pressure can still filter through supply chains.
However, there is also support in the system:
- Interest rates were cut twice in fall 2025. That can reduce pressure on households, especially where debt levels are higher.
- Inflation is expected to move closer to 2 percent by the second half of 2026. That can improve purchasing power and support steadier spending later.
- Housing activity remains a major provincial driver. Some provinces saw stronger home sales and higher housing starts. This matters because residential construction can keep local economies moving even when other sectors are softer.
- Jobs also showed resilience late in 2025, with stronger hiring toward the end of the year. The report highlights that labour performance varied, with Alberta and Saskatchewan seeing stronger job growth than several other provinces.
Why This Matters for Immigration Plans and Newcomers
This report is not an immigration policy document. But it clearly connects population growth to economic potential.
When population growth slows, demand for housing, services, and certain jobs can cool in the short term. Provinces that relied heavily on large inflows of nonpermanent residents may feel the change more directly.
At the same time, Canada still needs skilled workers. Especially in healthcare, trades, construction, and key industries that keep communities running. For immigrants and international students, the smartest approach is practical:
- Choose programs and pathways aligned with real provincial needs
- Build a profile that matches labour market demand
- Stay updated on changes that affect work permits, PR pathways, and regional programs
Follow Scotiabank Provincial Outlook 2026 Reports and Updates With Canada Immigration News! The Scotiabank provincial outlook 2026 report sends a clear message. Growth is slower right now, but stable. And Canada is preparing for a stronger lift as investment support and policy actions feed through into 2027.
