The Bank of Canada’s October 28, 2026 Monetary Policy Report does not show that a shopper’s price has already changed because U.S. tariffs appear in the forecast. In the Canadian-economy outlook, those tariffs are a projection assumption: they restrain non-commodity exports, and the export path stays below the July forecast. Separately, Canadian counter-tariffs, higher foreign prices and past depreciation of the Canadian dollar make imports more expensive. That is a path for volumes, costs and inflation. It is not a finished cut in a U.S. shelf price, and it is not a Canadian store receipt.
What the October outlook actually records
The page is the Canadian outlook inside the October 2026 Report, identified in the Bank’s publication address by the date October 28, 2026. The Bank revises 2026 growth in gross domestic product to 1 percent. It says that figure reflects strength in the middle of the year, partly offset by weakness in the fourth quarter. Because October 29 is only the start of that quarter, the full-year 1 percent number is not a completed annual result.
Growth is projected to average 2 percent in 2027 and 2028, modestly above the July Report, with support from investment, government spending and the fading of a large 2026 inventory drag. Consumption growth is put just above 2¼ percent in 2026 and around 2 percent on average afterward. Higher long-term interest rates are projected to weigh on consumption, partly offset by income gains from past terms-of-trade improvements. These are spending projections, not prices.
Exports still grow, but the tariff path sits below July
Exports are projected to keep expanding even while U.S. tariffs weigh on affected sectors. The pace slows to around 1¼ percent in 2027 because U.S. tariffs restrain non-commodity exports. Growth is then projected to pick up in 2028 as that drag diminishes. Non-energy exports are supported by strong U.S. demand. Energy exports are projected to rise as additional pipeline capacity comes online. The Bank does not name the pipelines or the tariff rates in this section.
The comparison that matters for the tariff assumption is directional. Because of the new U.S. tariffs, the path of exports remains below the trajectory in the July Report. That sentence compares two forecasts. It does not measure how much revenue any one Canadian exporter has already lost, and it does not say a U.S. buyer is paying less at a checkout. Strong U.S. demand and a tariff restraint can sit in the same projection: one supports non-energy exports, the other holds the overall export path under the July line.
Slow labour-force growth and the effect of U.S. tariffs on productivity growth are also described as constraints on production. Again, that is an aggregate projection, not a plant-level layoff count or a contract-by-contract loss.
Imports get more expensive in the forecast, not on a single bill
Import growth is projected to moderate from about 3 percent in 2026 to around 2 percent in 2027 and 2028. Part of that slowdown is demand: the Bank says the strength in domestic demand seen in the second quarter of 2026 fades. A separate cost channel also restrains demand. Rising foreign prices, Canadian counter-tariffs, and the past depreciation of the Canadian dollar make imports more expensive.
Using the Bank’s rounded figures, the step down from about 3 percent to around 2 percent is roughly 1 percentage point of import growth. That arithmetic describes the projected volume path. It is not a 1 percent change in the price of any imported good, and it is not a tariff rate. The outlook gives no product list and no duty schedule.
Who pays is not settled here. A Canadian counter-tariff can fall on a Canadian buyer. A U.S. tariff on a Canadian export can fall on the seller, the U.S. buyer, or both, depending on contracts and competition. Past depreciation can raise the Canadian-dollar cost of goods priced abroad. None of those statements shows that one shelf price moved on October 28.
Residential investment is projected to rise by slightly less than 1 percent a year on average in 2027 and 2028. Higher energy and imported-input costs are expected to make construction more expensive and restrain building, alongside affordability limits, slow population growth and higher borrowing costs. That is a restraint on activity, not a quoted building price.
The inflation path is pass-through, not a receipt
CPI inflation is projected to stay above 3 percent through the third quarter of 2027, about 1 percentage point above the July projection. It rises until the first quarter of 2027 as energy and non-energy import costs pass through and slack fades, then eases toward 2 percent by mid-2028.
Higher oil prices, linked to lower global energy supply and other cost increases, are the main upward source. Energy costs add pressure into early 2027. Energy-price inflation is projected to turn negative at the end of 2027, while earlier increases still move through transport and production. Non-energy import costs remain a pressure through 2027 from oil-sensitive inputs, Canadian counter-tariffs and past depreciation of the Canadian dollar.
The Bank says firms absorbed most of these increases at first and are expected to pass on more over the next 12 months as spare capacity shrinks. It ties that view to business surveys in the Current conditions section, not in this outlook passage. Labour costs are not a material upward source. Weaker demand from U.S. tariffs and trade uncertainty is only a partial offset.
The page starts a component chart for food, energy, other goods, shelter and other services, but the text available here stops before those results. Watch whether 2027 export growth is near 1¼ percent, whether the tariff drag fades in 2028, whether import growth is near 2 percent, and whether CPI stays above 3 percent into late 2027 before nearing 2 percent by mid-2028. Trade-policy or energy-price news can revise the assumption without becoming a household bill.