Watch the video here or read transcript here

The summary to know:

1. The Canadian economy is experiencing a combination of major supply and demand shocks which will depress potential economic growth in 2026.

2. As a result, investors will have to recalibrate their definition of “good/strong” growth and “bad/weak” growth.

3. This is important because the Bank of Canada uses an output gap framework to help set monetary policy.

4. A low bar for potential growth will make it less challenging to close the output gap.

5. If RBC’s above-potential-growth forecast materializes, it could bring forward expectations around the timing of rate hikes and impact the Canadian dollar.