Canada’s inflation rate has moved higher due to energy prices, but underlying economic pressures remain more complex. While energy-related inflation could ease if geopolitical tensions subside, longer-term concerns about productivity and competitiveness continue to weigh on the country’s outlook.
BNN Bloomberg spoke with Jennifer Tozser, senior wealth advisor and portfolio manager at National Bank Financial Wealth Management, about inflation, interest rates, regional economic divergence, capital investment and why investors may not need to chase high-profile IPOs.
Key Takeaways
- Energy prices are driving Canada’s higher inflation rate, while core inflation remains near two per cent and is less concerning for policymakers.
- Weak productivity growth remains a significant structural challenge, leaving Canada lagging many G7 peers and contributing to longer-term inflation pressures.
- Higher energy prices are benefiting provinces such as Alberta, Saskatchewan and Newfoundland, while Ontario and Quebec face greater economic and housing-related challenges.
- Increased capital investment, infrastructure development and improvements in competitiveness could help support broader growth beyond the energy sector.
- Investors may already have exposure to many high-profile private companies through large-cap holdings and index funds, reducing the need to chase new IPOs.
Read the full transcript below:
LINDSAY: Canada’s inflation trend is turning higher again, driven by energy, but with signs underlying pressures are also building. So, for more, we’re joined by Jennifer Tozser, senior wealth advisor and portfolio manager at National Bank Financial Wealth Management. Good morning. It’s great to have you join us.
JENNIFER: Good morning, Lindsay.
LINDSAY: So, we’ll start with the CPI data that we saw come in today. Were the numbers kind of in line with your expectations, or were they a little higher than what you thought?
JENNIFER: Well, nobody likes to see a disconnect in inflation numbers where so much is contributed to just one sector of the market, which in this specific situation, of course, is energy. Having core inflation sitting around two per cent on its own wouldn’t be too bad, but when you have over three per cent, as we’ve all seen at the gas pump and in our energy bills, that’s something that is very difficult to manage within the economy.
LINDSAY: What do you think investors should be paying more attention to, though: that headline inflation of 3.2 per cent or the core inflation of two per cent, as you mentioned?
JENNIFER: When I think about investing and I think about interest rates, what I’d look at is how those costs are going to affect the profitability of companies and how those increased costs are going to affect the ability of the consumer to purchase things. So, two per cent inflation, I wouldn’t be too worried about. There’s a lot of talk in the U.S. about what would happen if the five-year bond rate — sorry, the 10-year bond rate — went over five per cent, and I think that could cause some nerves in the market. But from a corporate point of view, from a balance-sheet structuring point of view, senior management is going to be aware of that, and they’re going to manage that accordingly.
What’s most worrisome for inflation is when it’s unexpected because nobody’s ready for it. As we’re looking toward having some possible positive negotiations going on around the Strait of Hormuz, hopefully that extra inflation will go away.
LINDSAY: You say the bigger issue is weak productivity. What do you mean by that?
JENNIFER: Well, if you look at Canada’s last 10 years, we’ve definitely had a very negative productivity performance, especially against our G7 peers, where they’ve been able to progress and we have not. So, as a country, we’ve been able to hide our lack of productivity growth with immigration, which caused increased GDP. But we have an awful lot of room that we have to catch up in order to be competitive.
LINDSAY: But even though we have a lot of room we need to catch up, you say there’s growing divergence across Canada. When you’re looking at different provinces, you’re seeing different things in terms of what we’re producing and how well we’re doing. Is that right? Tell us what you’re seeing there.
JENNIFER: Absolutely. When you’re looking at the prices that we have right now in the energy sector, those are good for provinces that are effectively producing energy, specifically Alberta, Saskatchewan and, to a lesser extent, Newfoundland. Provinces like Ontario and Quebec, which don’t have large profits in their economies from energy but have relied more traditionally on manufacturing, and you combine that with the fact that they have most of the new immigration coming into their provinces, that’s created their housing crisis. They’re not in as good a position.
LINDSAY: Going back to the CPI data that came out this morning, I wonder how you feel that might affect interest rates going forward. For the rest of the year, how might that affect the Bank of Canada’s forecast for 2026, or has it kind of already been priced in?
JENNIFER: Well, I think they’re going to be pricing in two components, right, which is the standard productivity growth. How could that contribute to inflation? And we are by no means in a hot market in Canada, with the exception of energy.
As we’ve talked about, and I’m certain you’ve heard before, the consideration is that with energy there’s a premium right now in the oil price because of what’s happening in the Strait of Hormuz, and when that goes away, that inflation component will also go away. So, I don’t think you need to price it in. They’re not pricing it in for a long-term effect.
LINDSAY: Got it. You say we’re in a bit of a hot market right now in Canada with energy. You touched on this, but what do you think needs to happen for some of the other sectors, maybe on the TSX, to start performing?
JENNIFER: Well, we’re looking for capital investment, that’s for certain. The federal government has made it clear that they want to develop infrastructure. There’s a whole bunch of enthusiasm about increasing the power grid to support AI manufacturing, making sure we’re a place that people go to.
I think another thing that has to happen, of course, is that we need to be more competitive. Right now, if you’re a foreigner looking to buy in Canada, our weak Canadian dollar is good for the foreigner, but for Canadians we don’t really want to lose our purchasing power. That’s another consideration because, when we’re competitive, we don’t produce all the components of what we’re manufacturing. So that’s a bit of a disadvantage for us.
LINDSAY: I see. Okay, I want to switch gears quickly before we have to wrap up here and ask you about some of the IPOs that we’ve seen come to the market recently, some that are expected to list, some big ones as well. You’re saying investors don’t necessarily need to chase IPOs. Why do you think that?
JENNIFER: No, chances are you already own it, right? Amazon, Alphabet, Brookfield — many different portfolio managers already own these companies, and why I mention the Amazons and the Alphabets is they also own, you know, we’re talking specifically about Anthropic, OpenAI and SpaceX, they own those as private companies. So you’re already exposed.
And then, of course, there’s a lot of money right now in passive investment, so that would be index investing, and they are going to be part of the Russell 3000 and then the Nasdaq 100. So you can get exposure in that manner.
LINDSAY: Okay, but they probably—
JENNIFER: Already have it.
LINDSAY: Okay. You know what? We’ll actually leave it there because we’re out of time. Jennifer Tozser, senior wealth advisor and portfolio manager at National Bank Financial Wealth Management, appreciate your time. Thanks for joining us.
JENNIFER: Thank you.
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This BNN Bloomberg summary and transcript of the June 22, 2026 interview with Jennifer Tozser are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
