BMO on The Day, Week Ahead in Canada

07:32 AM EST, 11/03/2025 (MT Newswires) -- Friday's Labour Force Survey (LFS) will highlight a soft jobs market in Canada, said Bank of Montreal (BMO).

The bank noted it doesn't expect that to change in October, with an estimated 10,000 job gains, leaving the jobless rate steady for the third straight month. The Alberta teachers' strike, which lasted for most of the month, will weigh on hours worked and, as such, on economic activity for October.

Meantime, the employment rate has stabilized despite demographic-driven downward pressure, while the Bank of Canada highlighted that slower population growth means that fewer new jobs are needed to keep the rate steady, pointed out BMO.

On Tuesday, markets will get the Federal Budget and the bank highlighted that "the federal deficit could push into the mid-$70 billion range this fiscal year, and persist near $70 billion in FY26/27." But, "the nature of the Canadian deficit increase should be more palatable from an economic perspective than those of the prior government. That is, tax relief and infrastructure priorities bring a more pro-growth policy agenda at a time when Canada needs a boost. Some tax relief has already been rolled out on personal incomes and the carbon tax, which is already a departure from past priorities; defence spending has been ramped up to 2% of GDP immediately; and more than $20 billion in infrastructure spending in areas such as trade, transportation and health care are to roll out."

On Thursday, the Province of Ontario will provide its fiscal update, as the FY25/26 shortfall was first projected at $14.6 billion. BMP added that "the deficit is on track to widen sharply this fiscal year, but that partly reflects conservative budget assumptions and large contingencies. Ontario has a habit of hopping over the budget expectations bar, and recall that the FY24/25 deficit came in much better than expected at $1.1 billion."

Investors will get the S&P Canada manufacturing PMI at 9:30 a.m. ET on Monday.

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