Canada’s Economy Continued to Grow in February

Canada’s GDP rose 0.2% month‑on‑month in February, driven mainly by a 1.8% jump in manufacturing and a 0.4% rise in goods industries, while only 8 of 20 sectors expanded. With a flash estimate for March, Q1‑2026 growth is tracking about 1.7%, broadly in line with the Bank of Canada’s projections. The report implies near‑term economic momentum is intact but subject to cross‑currents—trade uncertainty and Middle East spillovers—that leave two‑sided risks to the outlook. TD’s base case: the BoC holds its policy rate steady for the rest of the year. Market impact: the data support a steady‑policy narrative for the Canadian dollar, suggesting limited immediate BoC rate repricing but continued sensitivity to incoming data and geopolitical shocks.