Canada may stand out on the global economic surprise index, but it’s for posting poor results, say National Bank of Canada economists.

“Disappointing economic data is not a global phenomenon right now,” Taylor Schleich and Ethan Currie said in a note on Tuesday. “Canada stands out as an underperformer among major economies, particularly against the United States.”

New York-based Citigroup Inc. operates the economic surprise indexes, which measure data surprises against market expectations. A positive reading means numbers have come in ahead of expectations, while a negative one means they have missed expectations.

Canada on Tuesday was at minus 88.2, a big drop from a positive reading of around 100 at the end of last year. The U.S., where labour and retail data have recently come in better than expected, was at 43.7, making for the biggest gap on the index between the two neighbours in four years.

National Bank’s economists aren’t surprised by Canada’s poor showing.

“Economic data in Canada has stumbled out the gate so far in 2026,” they said, citing year-to-date jobs losses and several employment misses compared with analyst expectations.

For example, the country has shed more than 110,000 positions since the start of the year. Economists forecasted the economy would add 10,000 jobs in May, but it lost almost 18,000.

The biggest miss of the year, however, came in March, when the economy lost 84,000 positions versus forecasts of it adding 10,000.

But Canada’s recent poor showing on Citi’s index isn’t its worst. That came in late 2022, when its score fell to its lowest level of nearly minus 150 because the economists said the Bank of Canada “was bludgeoning the economy with rate hikes” due to rising inflation , partly spurred by an energy supply shock after Russia declared war on Ukraine.

Canada’s economic numbers were worse in the latter part of 2022, but the economy had been spitting out positive inflation surprises and momentum was building prior to the Bank of Canada rate hike campaign, they said.

The economic echoes of today — an oil supply crisis and inflation worries — are similar, but Schleich and Currie wonder whether geopolitics or bad economic surprises hold more sway on the outlook for i nterest rates .

There have been times when geopolitical events have pushed economic data to the sidelines in terms of the interest rate path, they said. For example, Canada produced some stronger-than-expected numbers in early 2025, but markets focused on the threat posed by U.S. tariffs.

The Bank of Canada continued to cut interest rates throughout 2025, taking them to 2.25 per cent from 3.25 per cent at the start of the year as it tried to diminish the effect of Donald Trump’s tariff war.

Geopolitics also took centre stage in the early days of the oil crisis, the pair said. But they said the poor economic surprises Canada is producing these days will probably hold more sway over what happens with interest rates.

As evidence, they pointed to yields on five-year Government of Canada bonds , which are falling relative to U.S. Treasury yields, and is consistent with weak/disappointing economic data in Canada.

They also expect more “sluggishness” ahead for the economy, especially given the Canada-U.S.-Mexico Agreement negotiations loom large as a threat.

“When it comes to the economic and inflation environment in 2026, this time is different, allowing the Bank of Canada to take a more patient policy approach,” they said.

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The Business Development Bank of Canada says a strained venture capital market and continued reliance on foreign capital is making it harder for homegrown startups to expand and is putting economic sovereignty on the line.

“Canada is exceptionally good at creating innovative companies. Where we fall short is helping them scale and stay here,” Geneviève Bouthillier, executive vice-president BDC Capital, said in a statement on Tuesday.

“The heavy reliance on foreign capital to fill that gap … has implications for Canada’s ability to retain ownership, decision-making and long-term value. This is now an economic sovereignty issue.” — Yvonne Lau, Financial Post

Read the full story here.

  • U.S. Trade Representative Jamieson Greer is in Mexico City today to kick off bilateral talks ahead of the Canada-United-States-Mexico-Agreement review.
  • CANSEC 2026, billed as Canada’s leading defence, security and emerging technology event, opens in Ottawa. Keynote speakers include Defence Minister David McGuinty and Industry Minister Melanie Joly.
  • Today’s data: U.S. MBA mortgage applications, ADP weekly employment change, Richmond Fed manufacturing index and business conditions, Dallas Fed services activity
  • Earnings: Bank of Nova Scotia, Bank of Montreal, National Bank of Canada, EQB Inc., Davids Tea, Coveo Solutions Inc.

  • Failed transactions piling up in Canada’s slumping real estate market
  • How Canada’s first commercial spaceport is taking shape in Nova Scotia
  • ‘Low-hire, low-fire’ job market complicates Bank of Canada’s interest rate path

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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.

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