Canada’s Latest GDP Report Shows Zero Growth, Says StatCan
The Canadian economy experienced a standstill in November 2025, with the gross domestic product (GDP) recording zero growth. This stagnation followed a decline of 0.3% in October, as reported by Statistics Canada.
Service Gains Offset Manufacturing Declines
While services sectors showed growth, this was not enough to counterbalance the downturn in goods production, particularly in manufacturing. The manufacturing sector overall saw a decrease of 1.3%, with durable goods falling by 1.9%. Key areas affected included transportation equipment, machinery, fabricated metal products, and motor vehicles.
Durable Goods Sector Performance
- Durable goods decline recorded in November reached lows not seen since mid-2011.
- This drop masks the impact of COVID-19 in the first half of 2020.
The ongoing trade tensions, primarily stemming from tariffs imposed by the U.S. administration under President Donald Trump, have adversely impacted Canada’s manufacturing sector. Notably, Canadian steel, aluminum, lumber, and automobile imports faced steep duties.
Impact of U.S. Tariffs on Canadian Economy
Concerns also grow regarding potential additional tariffs on Canada’s aviation manufacturing sector. The uncertainty around these trade policies has led Canadian businesses to adopt a cautious stance on expansion and hiring.
Andrew DiCapua, a principal economist for the Canadian Chamber of Commerce, noted that the economy closed the year lacking momentum for 2026. He pointed out that the current trade war has caused significant setbacks in the manufacturing sector.
Service Sector Insights
Despite the challenges in manufacturing, service sectors provided some relief. The retail trade sector expanded by 1.3% in November, rebounding from previous declines in September and October. Several service subsectors recorded growth due to prior work stoppages.
- Food and beverage retailing saw an increase of 2.5%, largely driven by alcohol sales.
- Educational services increased by 1% due to the resumption of classes following a teachers’ strike.
- Transportation and warehousing services climbed by 0.9%, with a significant rise of 41.7% in postal services after job actions ended.
Economic Outlook
Commenting on the overall economic landscape, Derek Holt from the Bank of Nova Scotia described the situation as complex. He indicated uncertainty in whether changing numbers would surprise the Bank of Canada, which has expressed a focus on future trends over current data.
In a related announcement, the Bank of Canada maintained its key policy rate at 2.25%, with expectations of some modest growth towards the end of 2025 and into 2026. The final GDP report for December 2025 is anticipated to be released on February 27, 2026, with preliminary data suggesting a slight growth of 0.1%.
