07:38 AM EDT, 03/26/2026 (MT Newswires) -- Canada will release the Survey of Employment, Payrolls and Hours (SEPH) for January at 8:30 a.m. ET on Thursday, said Bank of Montreal (BMO).

The payroll survey can be used to corroborate the softness in the more timely Labour Force Survey (LFS) to start the year, noted the bank.

BMO also sees job vacancy data, and the rate had fallen below 3% as of December, indicating softer job market conditions. While the bank doesn't estimate much job loss on balance -- after smoothing the monthly volatility -- BMO isn't seeing much net new hiring at all either.

Perhaps it's the tariff situation sapping the confidence of firms to make big hiring or capital expenditure decisions, or perhaps it's the early impact of Artificial Intelligence (AI) leaving firms to see if they can squeeze more out of their existing workforce, added the bank.

The province of Ontario will table its FY26/27 budget later Thursday. All things considered-tariff troubles, a housing market recession and below-potential growth -- the fiscal situation has held up very well, according to BMO. Indeed, by holding its ground on this front, Ontario has actually seen meaningful improvement on a relative basis versus its peers, which have mostly swung deeper into deficit and debt.

At last check, Ontario was expecting a $13.4 billion deficit for FY25/26, or 1.1% of gross domestic product. The FY26/27 budget will likely continue to prioritize investment in select areas -- such as infrastructure, critical minerals, housing, manufacturing and AI -- while avoiding any major tax changes, pointed out the bank.

Wednesday's announced HST tax credit on the purchase of new homes for all buyers will be in this document. BMO saw this as less of an affordability measure and more of a measure aimed to help builders clear out excess inventory, which is running at around 20,000 units in GTHA condo space right now.

The time-limited nature of the measure -- one year -- suggests this is the intention, noted the bank. But, BMO wonders if it will be the game changer many think it will be, given that the resale market is effectively trading below replacement cost -- or new purchase prices -- anyway, with plenty of inventory.

In the meantime, the extension of this measure to investors will add even more rental supply to a market where rents are already falling. It appears that the HST exemption for units put on the rental market is also intended to directly support builders, as they will be able to convert unsold units to rentals without absorbing an HST hit. The bank will see if there are any other related measures in Thursday's budget.