Canada’s Economy Heated Up in January, but StatCan Warns of Cooling Trend in February

According to Statistics Canada, the Canadian economy showed strong growth in January but hit a slowdown in February.

The agency reported a 0.4 percent increase in real gross domestic product in January, driven mainly by growth in the oil and gas, quarrying, and mining sectors.

This marked an improvement from the 0.3 percent growth seen in December, which was revised up slightly.

In January, Canada’s goods-producing industries saw a significant 1.1 percent increase, the largest jump in over three years.

Sectors such as manufacturing, utilities, and construction all experienced growth, while the services side of the economy also saw a modest 0.1 percent rise.

However, a slowdown in retail trade negatively impacted GDP at the start of 2025 following strong growth in December.

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Early estimates from the agency suggest that growth remained stagnant in February.

Senior economist Andrew Grantham at CIBC explained that the slowdown in February may be attributed to severe winter weather across Canada and the conclusion of Ottawa’s sales tax exemption mid-month.

In contrast, the growth seen in January could be linked to Canadian businesses anticipating U.S. tariffs, which were frequently threatened throughout the month before partially taking effect in March.

“We anticipate that tariffs will have a more pronounced negative impact on GDP in March and Q2,” Grantham stated.

President Donald Trump recently announced new tariffs targeting vehicles manufactured outside the U.S.