New TD outlook shows resilience – but a patchy path for mortgage markets
TD Economics’ latest provincial outlook painted a picture of resilience, not boom times, for Canada’s economy and housing market in 2025–26 – with important implications for lenders and brokers.
The analysis suggested that while growth leaders such as Alberta, Saskatchewan, PEI and Newfoundland and Labrador stand to outperform, central provinces including Ontario, Quebec and Manitoba are expected to lag under the weight of a prolonged trade war and softer housing conditions.
Across the country, TD said job markets have “turned in a more resilient performance than we had expected in September,” with downside surprises in unemployment especially notable in Ontario, Alberta, Quebec, New Brunswick and PEI.
It still expects unemployment rates to “broadly peak by Q1‑2026 before drifting lower thereafter.”
Population growth, meanwhile, is projected to slow sharply as tighter federal immigration policy constrained labour supply and eased rent pressures, particularly in Ontario, BC and Quebec.
Resilience becomes the new watchword
TD’s baseline view is that “significant regional variations will exist as Canada’s housing market continues its gradual improvement next year,” with price growth likely to lag “significantly in Ontario and, to a lesser extent, B.C.” in the face of looser supply‑demand conditions.
In contrast, Quebec and the Prairies are expected to see “firmer price gains, underpinned by tight conditions, and decent affordability (in the Prairies).”
That provincial split echoes TD’s dedicated housing-market work, which framed the national picture as “a gradual, modest recovery in the housing market” over 2025–26.
Housing outlook splits along regional lines
TD economist Rishi Sondhi previously said “elevated uncertainty and a deteriorating jobs market will yield subdued sales and price growth for much of 2025,” with prices expected to fall most in Ontario (down 6.4%) and British Columbia (down 4.1%).
Manitoba, Saskatchewan and Alberta were projected to “outperform slightly, thanks to tighter supply and comparatively better affordability.”
Canada Mortgage and Housing Corporation highlighted that trade tensions and tariffs were “reshaping Canada’s housing market and growth outlook through 2025,” with resale markets softest in Ontario and BC while Quebec’s housing activity slowed less than elsewhere.
For mortgage professionals, growth and housing activity look set to remain uneven, but this is a slow‑grind adjustment rather than a cliff edge – rewarding lenders and brokers who tailor risk appetite, product design and distribution strategies to sharply diverging regional realities.
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