Canadian economy lost momentum as 2025 drew to a close: Statistics Canada
Canada's economy slowed in the fourth quarter of 2025, with real GDP declining 0.2% due to weaker production and trade tensions with the US. For 2025 as a whole, the economy grew 1.7%, slower than the 2.0% pace recorded in each of the previous two years.
Canada's economy lost momentum toward the end of 2025, according to Statistics Canada. Real GDP declined 0.2% in the fourth quarter, driven by weaker production as businesses drew down existing inventories. Trade tensions with the US continued to impact economic performance, with US tariffs on Canadian steel, aluminum, and motor vehicles weighing heavily on exports. Exports to the US fell by $29.4 billion in 2025, while shipments to other countries rose by $27.6 billion. Manufacturing was one of the hardest-hit sectors, with output declining in industries including machinery and motor vehicles. Despite weaker goods production, household spending increased in the fourth quarter, supported by higher spending on rent and financial services. Labour market conditions improved late in 2025 before weakening again in early 2026, with job losses of 109,000 recorded in the first two months of 2026.
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