Shoppers browse items for sale at Toronto's Eaton Centre on Boxing Day.Sammy Kogan/The Canadian Press

John Rapley is a contributing columnist for The Globe and Mail. He is an author and academic whose books include Why Empires Fall and Twilight of the Money Gods.

Despite being buffeted by Donald Trump’s trade war, the Canadian economy proved resilient in 2025. Although some sectors faced real hardship, the economy as a whole managed to eke out a modest gain and employment recovered from earlier in the year – a contrast to what’s happening south of the border, where unemployment is now rising.

Will 2026 bring more of the same, or will the economy finally succumb to external pressures?

Most forecasters are currently feeling pretty rosy about 2026 and expect Western economies to continue growing, if tepidly. The reasons for their optimism are clear. Stock markets across the world had a runaway 2025, so investors are feeling rich and companies are flush with cash.

At the same time, the Chinese and Japanese governments keep pouring stimulus money into their economies, which will stir demand there, while the U.S.’s One Big Beautiful Bill will kick in, providing Americans with larger-than-usual tax refunds next spring. So, it looks........

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