Canada in January 2026: the most important developments in economy
Canada's economy in January 2026 was shaped by a sharpening trade dispute with the United States. On 29 and 30 January, President Donald Trump said he was decertifying Canadian-made aircraft for US operations and threatened a 50% tariff on them, naming companies such as Bombardier, whose shares fell. He linked the threats to Canada's approval of Gulfstream business jets, which he called an unfair trade practice. The Canadian government said the dispute can be resolved. The United States and Mexico agreed to begin formal talks on the USMCA trade pact, raising questions about Canada's place in the process.
The second major theme was a new trade arrangement with China. On 16 January, the two countries reached a deal cutting tariffs on Chinese electric vehicles and Canadian canola, with an annual quota of Chinese vehicles entering Canada at preferential rates. Prime Minister Mark Carney called it a landmark agreement. Washington said Canada would regret letting Chinese vehicles into its market, and on 24 January Trump threatened 100% tariffs on Canadian goods over the pending China deal. Ontario Premier Doug Ford said the province received only a few hours' notice and Canadian auto industry leaders warned about the domestic sector's competitiveness. Canadian beef returned to Chinese markets for the first time since 2021.
At the World Economic Forum in Davos, Carney said the global economy is going through a rupture rather than a transition, that the old order is not returning, and that Canada could help build a new trading system less reliant on the United States. He opposed possible US tariffs linked to Greenland and later told Trump he meant what he had said.
Canada also widened other trade ties, signing agreements with the United Arab Emirates and South Korea, including a memorandum on auto-sector cooperation, and pledging to expand oil and petroleum trade with India. Shell and Mitsubishi were reported to be exploring sales of their stakes in LNG Canada, and BHP put the cost of the first phase of its Jansen potash mine at $8.4 billion. The Bank of Canada held its key interest rate steady.
by WorldBrief & Maksim Micheliov | AI-generated summary
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