In Ottawa, spring arrives with a cautious kind of optimism.

The last snow has melted from Parliament Hill. The river moves again beneath thinning ice. In office towers and coffee shops, in shipping yards and wheat fields and oil towns far to the west, people listen for signs in the numbers—small signals that the country’s long economic winter may not deepen after all.

This year, the signs are mixed.

The winds beyond Canada’s borders have been restless. Tariffs rise and fall in Washington with the rhythm of politics. Trade routes shift under the strain of global uncertainty. Oil prices climb on distant wars. Markets sway with every headline. And yet, against that unsettled horizon, Canada’s economy appears to be holding its footing.

Not sprinting.

Not soaring.

But still moving forward.

In its spring economic statement released this week, the Canadian government said the economy is expected to continue growing despite global trade turmoil and geopolitical strain. The federal deficit for the 2025–26 fiscal year is now projected at C$66.9 billion—significantly lower than the C$78.3 billion forecast just months ago in November.

The improvement comes from an unusual convergence of restraint and fortune.

Government officials pointed to spending controls and stronger-than-expected revenues. Higher global oil prices, driven in part by conflict in the Middle East and disruptions in global energy markets, have lifted revenues from crude exports and royalties. Canada, as a major energy producer, has found itself benefiting from the same turbulence unsettling many of its trading partners.

A strange kind of shelter in a storm.

Real GDP growth for 2026 is now forecast at 1.1%, slightly lower than previous projections, reflecting the drag of trade uncertainty and weaker business investment. But recession—the word that hovered over much of last year’s economic debate—has, for now, remained outside the door.

In 2025, Canada’s economy grew by 1.7%.

Not a boom.

But enough to surprise those who had expected contraction.

Consumer spending held up longer than many economists predicted. Job losses in sectors exposed to U.S. tariffs were contained. Exports suffered, but not evenly. Trade with the United States softened under tariff pressures and uncertainty surrounding North American trade negotiations, yet exports to non-U.S. markets rose sharply as businesses searched for new customers across Europe, Asia, and beyond.

There is adaptation in the numbers.

A quiet reorientation.

Canada’s trade diversification efforts have begun to show results, with non-U.S. goods exports rising by roughly 36% since 2024, according to government figures. New infrastructure—ports, pipelines, and transportation links—has helped natural resource sectors remain resilient even as manufacturing absorbs more pain.

Still, the road ahead is uneven.

The Bank of Canada is widely expected to hold its key interest rate steady at 2.25% as policymakers weigh two competing pressures: economic softness on one side, and rising inflation risks from higher energy prices on the other. The cost of gasoline has already begun to rise. So have broader concerns that if oil remains expensive for too long, the benefits to exporters may be outweighed by the burden on households and businesses.

And then there is Washington.

Donald Trump’s protectionist trade agenda continues to cast a long shadow over Canadian boardrooms and factory floors. Tariffs on selected sectors have disrupted exports and delayed investment decisions. Businesses remain cautious. Some U.S. clients have slowed orders. Some Canadian firms have paused expansion plans altogether.

The uncertainty itself has become a cost.

Yet Ottawa’s fiscal picture has brightened enough to create political opportunity.

Prime Minister Mark Carney’s government is using the improved outlook to announce new spending initiatives, including billions for worker training, infrastructure projects, and cost-of-living relief. Plans include funding to train up to 100,000 skilled workers for major national projects and efforts to strengthen domestic industries against future trade shocks.

The strategy is part stimulus, part shield.

Critics warn the government may be spending a temporary windfall too quickly. Supporters argue the moment demands investment before the next storm arrives.

And storms do arrive.

In Canada, prosperity has often depended on weathering what comes from elsewhere—commodity swings, American politics, distant wars, and the invisible tremors of global markets. This year is no different.

But for now, the country remains standing.

The cranes still move at ports.

The oil still flows west to east and south to sea.

Shoppers still spend. Businesses still adjust. Economists revise forecasts in careful increments.

And beneath Ottawa’s spring sky, the story is not one of triumph, but of endurance:

A country battered by trade turmoil, yet still growing.

A deficit shrinking, though not gone.

A future steadier than feared, though still written in pencil.

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Sources Reuters Bank of Canada Government of Canada The Wall Street Journal Global Affairs Canada