TD Securities’ Robert Both projects that higher oil prices will provide a tailwind to Canada's GDP growth in 2026, although ongoing export bottlenecks will constrain the upside potential [1]. According to Both, spare export capacity is estimated at 100,000 to 200,000 barrels per day in the fourth quarter of 2025, with an additional 300,000 barrels per day possible through expanded railcar shipments if conditions permit [1]. Maximizing existing pipeline infrastructure could contribute $8-9 billion to nominal GDP, representing a 0.3% increase, with real GDP rising by approximately 0.2% before accounting for downstream effects or fiscal responses [1]. If railcar shipments are increased, the nominal and real GDP boosts could reach 0.6% and 0.4%, respectively, but without new export capacity, growth from higher oil prices remains limited, especially as the TMX pipeline is expected to reach full capacity by April [1].
TD Securities forecasts that higher crude oil prices could raise GDP by 0.4 percentage points by the fourth quarter, relative to a $65 baseline for WTI crude [1]. Despite these gains, the output gap is expected to remain negative into 2027, which should allow the Bank of Canada to keep its policy rate unchanged through 2026, even with the oil-driven boost [1].
No specific market reactions or analyst opinions beyond TD Securities’ projections are mentioned in the article. The report emphasizes that while energy prices are supportive, structural export limitations and a persistent output gap will temper the overall economic impact [1].
CONCLUSION
TD Securities anticipates that higher oil prices will modestly boost Canada's GDP in 2026, but export bottlenecks and a lingering negative output gap will limit the upside. As a result, the Bank of Canada is expected to maintain its policy stance through 2026. The market takeaway is cautiously optimistic, with growth potential constrained by infrastructure and export capacity.