Economic and Social Reports, April 2026

Released: 2026-04-22

There are five new articles available in today's release of Economic and Social Reports.

Summary of recent economic developments

The article "Recent developments in the Canadian economy: Spring 2026" provides an integrated summary of changes in output, employment, international trade, consumer prices and household finances during the second half of 2025 and early 2026.

Business investment scaled back as businesses navigated uncertainty and trade tensions over the past year. In the fourth quarter of 2025, combined business outlays on non-residential structures and machinery and equipment (M&E) were down 1.6% from levels reported prior to the trade disruptions in late 2024, largely reflecting lower spending on M&E. Businesses anticipate higher capital spending in 2026. Outlays on non-residential tangible assets by private organizations, measured in nominal dollars, are expected to be 2.8% above spending levels in 2025. Over two-thirds of the planned increase in private capital spending reflects higher anticipated outlays in Alberta after spending decreased in 2025.

Young Canadians bore the brunt of a challenging labour market in 2025 as uncertainty weighed on hiring intentions. The unemployment rate among 15-to-24-year-olds rose to 14.6% in September 2025, the highest rate outside of the COVID-19 pandemic period since September 2010. After eight consecutive months without a month-over-month increase, youth employment rose in October and November 2025 before edging down in December. At year-end, the unemployment rate among 15-to-24-year-olds was 13.3% and the employment rate among youth was 54.8%.

Labour market conditions worsened among youth in early 2026. Youth employment fell by 64,000 during January and February. The unemployment rate among 15-to-24-year-olds edged back above 14 percent in February.

Boost in productivity at Canadian firms that adopt artificial intelligence associated with investments in innovation and broad digital transformation

Artificial intelligence (AI) is reshaping the way businesses operate—but how much does it truly boost productivity? Using a novel Canadian firm-level database linking the Survey of Digital Technology and Internet Use and firm-level administrative records, the article "Artificial intelligence adoption and productivity in Canadian firms" shows that AI adopters are 16.8% more productive than non-adopters.

However, much of the advantage reflects firm selection and broader innovation capacity and digital transformation rather than AI alone. Firms with strong complementary capabilities—including research and development, cloud computing, data analytics, advanced robotics, and information and communication technologies training for employees—are significantly more likely to adopt AI.

The findings highlight that unlocking AI's full productivity potential requires complementary investments in skills, infrastructure, and digital transformation—a critical insight for translating AI adoption into sustained economic growth.

Recent trends in immigrant entry earnings

In recent years, the entry earnings of newly admitted immigrants to Canada have fluctuated substantially year to year. Understanding the sources of these fluctuations is important, because entry earnings are a key indicator of immigrants' initial labour-market integration. Entry earnings are commonly used to assess changes in immigration selection. The article "Why have immigrant entry earnings fluctuated widely in recent years? The role of immigration selection and labour-market conditions" examines the extent to which these fluctuations can be attributed to changes in immigrant selection and labour-market conditions.

Using data from the Longitudinal Immigration Database, the analysis focuses on immigrants who were admitted during the period from 2015 to 2022 and measures their entry earnings as annual wages or salaries in the first full calendar year after admission. Entry earnings are then compared across successive admission cohorts. The entry earnings of those admitted in 2022 decreased 13% relative to those admitted in the previous year, and 87% of this decrease was attributable to a large decline in the share of new immigrant workers with pre-admission Canadian earnings. In contrast, changes in labour-market conditions accounted for 92% of the decrease (-9%) in entry earnings for those admitted in 2019 and approximately half of the increase (+21%) observed for those admitted in 2020.

These findings underscore the importance of both immigrant selection and labour-market conditions in shaping early earnings outcomes among immigrants admitted since the mid-2010s.

Loneliness higher among immigrants with disabilities compared with Canadian-born counterparts

Loneliness is a public health issue that has been linked to premature mortality. New analyses in the article "Socioeconomic correlates of loneliness among immigrants with disabilities" find that certain socioeconomic circumstances increased the probability of severe loneliness among immigrants with disabilities.

Using data from the 2022 Canadian Survey on Disability, comparisons of immigrants with disabilities with their Canadian-born counterparts showed that the association between socioeconomic circumstances and loneliness differed between these two groups. Among persons living in food-insecure households, a higher percentage of immigrants with disabilities experienced a severe level of loneliness (34%) than Canadian-born persons with disabilities (27%). Even among those living in food-secure households, more immigrants with disabilities experienced severe loneliness (24%) compared with Canadian-born persons with disabilities (18%).

The association between core housing need and loneliness was also stronger for immigrants with disabilities. Among persons with disabilities who had a core housing need, a higher percentage of immigrants experienced severe loneliness (35%) than Canadian-born persons (21%). A similar pattern was found among those without a core housing need, as more immigrants with disabilities (27%) experienced severe loneliness than Canadian-born persons with disabilities (21%).

Overall, the findings highlight the intersection between socioeconomic circumstances and emotional well-being among immigrants with disabilities and point to the need for targeted supports that address the unique vulnerabilities of this population.

Characteristics of child care centres in Canada

The Canadian child care sector has been undergoing a period of transformation following the 2021 Federal Budget which committed over $27.2 billion towards making high-quality child care more affordable, inclusive, flexible, and accessible. The report "Insights into the accessibility, affordability, inclusivity, flexibility and quality of child care centres in Canada, 2024" gives a snapshot of child care centres providing care to children aged 0 to 5 years in April 2024. The findings contribute insights into centre characteristics, child capacity, funding, fees, and structural measures associated with child care quality.

According to data from the Canadian Survey on the Provision of Child Care Services, in April 2024 there were 11,092 child care centres across Canada serving children aged 0 to 5 years, enrolling about 627,500 children. Results suggest that the proportion of centres offering flexible or non-standard care options was limited; that 15% of centres had expanded their maximum capacity in the previous year to improve accessibility; that nearly three-quarters of centres had accommodations in place to improve inclusivity for children with long-term conditions or disabilities; and that the affordability of child care as indicated by child care fees varied considerably across child age category and province or territory.

About 7 in 10 centres outside of Quebec reported that they had received funding from federal-provincial/territorial agreements. These centres were more likely to be larger in terms of staffing and enrolment and were more likely to be not-for-profit. Continued data collection and analysis will provide policy makers and stakeholders with timely insights into the changing child care landscape in Canada.

Products

The April 2026 issue of Economic and Social Reports, Vol. 6, no. 04 (Catalogue number36280001), is now available. This issue contains the articles "Insights into the accessibility, affordability, inclusivity, flexibility and quality of child care centres in Canada, 2024," "Artificial intelligence adoption and productivity in Canadian firms," "Why have immigrant entry earnings fluctuated widely in recent years? The role of immigration selection and labour-market conditions," "Socioeconomic correlates of loneliness among immigrants with disabilities" and "Recent developments in the Canadian economy: Spring 2026."

Contact information

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