Bryan Yu, AVP and Chief Economist at Central 1 Credit Union, opened the 2026 COFI Convention’s macroeconomic outlook session by telling delegates that Canada and BC are navigating what he described as an era of poly-crises — with a Middle East conflict, ongoing trade pressures, and structural domestic weaknesses all converging simultaneously. His assessment was cautious across virtually every major indicator, with forestry among the sectors he identified as facing both immediate and longer-term headwinds.

Yu said the Middle East conflict, now in its sixth week at the time of his address, had driven oil prices sharply higher — spot prices to $144 and Brent futures above $100 — reflecting the significance of the Strait of Hormuz as a chokepoint for roughly 20% of global oil supply. A ceasefire had briefly pushed prices down by approximately $20 in a single day, but Yu said the world is already in a different place than it was six weeks ago. Higher oil prices, he said, are here to stay in the near term and are inflationary, though he was clear this is not a hyperinflationary environment comparable to 2008-09 or the period following Russia’s 2022 invasion of Ukraine.

Layered on top of the oil shock, Yu said the tariff and trade environment with the United States has not resolved. Most Canadian goods move under CUSMA and have not faced the headline tariff rates of 25% to 35% that dominated discussion earlier in the year — Canada’s effective average tariff rate sits at approximately 3% — but the underlying uncertainty persists and continues to limit business investment and consumer spending. He said exports in the early part of 2026 are down approximately 20% year-over-year across multiple sectors, and that the upcoming CUSMA review is weighing on business conditions. Yu said Central 1 has very little confidence that the US will agree to a long-term renewal of the agreement, and that businesses should expect an environment where the agreement is reviewed annually, limiting the investment certainty companies need to commit capital.

On the broader Canadian economy, Yu said growth last year came in at approximately 1.6% and the outlook for 2026 is around 1.3% or potentially lower. He cited two months of job losses totalling roughly 100,000 positions nationally, with unemployment sitting around 6.5%. He said Canada has underinvested in capital and manufacturing for over a decade, pivoting too heavily toward housing and consumer spending as growth drivers — a structural weakness that predates the current trade pressures. He also flagged population as a material drag going forward. After several years of sharp growth driven by temporary resident inflows, Canada’s population is expected to contract — Central 1’s base case projects negative growth of between 0.2% and 1% annually for the next two years — with BC particularly exposed given that its temporary resident share of population, at around 8%, is well above the federal government’s 5% target.

On BC specifically, Yu noted the province had been one of Canada’s strongest performers through 2023, growing at 2.5% to 3% annually. That period, he said, is over. Growth came in at approximately 1.3% last year and the forecast is likely to be revised downward. Employment fell by approximately 20,000 in February alone. He said BC will feel the population decline more acutely than most provinces, with knock-on effects for consumer spending and housing demand.

On forestry, Yu noted that BC’s exposure to US tariffs is somewhat different from other provinces, given that approximately 50% of BC forest products are shipped to Asia-Pacific markets rather than the US. However, he said the sector is being hit hard by the combination of softwood lumber dumping duties, additional tariffs, and fibre supply constraints — pressures he said had the sector on a downward trajectory well before the current trade environment intensified. He noted that forestry’s direct contribution to BC’s economy has declined from roughly 3.5% about two decades ago to between 1.5% and 2% today, and that he does not see significant upside for the sector in the near term.

On housing, Yu described a bifurcated national market, with record prices still emerging in Alberta and the Prairies while BC and Ontario are experiencing declining sales and prices driven by affordability challenges and economic uncertainty. He said BC housing starts are likely to fall approximately 20% from current levels over the next year, with over 5,000 unabsorbed new condos sitting unsold in Vancouver alone and vacancy rates in the city running above 4%. He said the BC and Ontario markets are likely to begin recovering in the back half of 2026, but described it as a slow grind. Nationally, he said, starts have been running at roughly 250,000 to 260,000 annually — a historically decent number — but he expects that trend to ease as BC and Ontario weigh on the national figure.

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