Canadian real GDP edged up 0.2 per cent in February, in line with consensus expectations and Statistics Canada’s preliminary estimate. Goods-producing industries rose 0.4 per cent, led by gains in manufacturing (+1.8 per cent) and mining, quarrying, and oil and gas (+0.4 per cent), which more than offset declines in agriculture (–1.3 per cent) and construction (–0.5 per cent). Utilities were flat.
Industrial production climbed 0.9 per cent, its strongest monthly increase since July 2025. Services-producing industries rose 0.1 per cent, supported by transportation and warehousing (+1.2 per cent), wholesale trade (+0.9 per cent), and information and culture (+0.7 per cent). These gains were partly offset by weakness in management services (–2.6 per cent), arts and entertainment (–2.5 per cent), education (–0.5 per cent), and public administration (–0.5 per cent). The decline in arts and entertainment largely reflects the NHL’s Olympic break and is expected to reverse.
Statistics Canada’s preliminary March estimate points to flat growth, leaving first-quarter GDP tracking a 1.7 per cent annualized gain.
The headline strength is largely a manufacturing story, but a narrow one. February’s 1.8 per cent rebound followed a 1.3 per cent decline in January tied to scheduled retooling and model changeovers at auto assembly plants. Excluding manufacturing, the economy was effectively flat. The sector remains 3.1 per cent below year-ago levels, weighed down by U.S. tariffs and CUSMA renewal uncertainty.
The April shift from 50 per cent tariffs on steel, aluminum, and copper inputs to a 25 per cent tariff applied to finished product prices represents a meaningful competitiveness headwind. The government has announced $1.5 billion in low-interest loans through the Business Development Bank for industries that manufacture and export products containing steel, aluminum, or copper. While this may provide some offset, smaller manufacturers are likely to face continuing challenges under the evolving Section 232/301 tariff framework.
On balance, the data suggests the economy held up through the first quarter of the year. With population growth now in reverse, real GDP per capita is on track for a 2.1 per cent annualized gain, the strongest in 15 quarters, a constructive signal given excess supply and elevated unemployment.
Risks remain tilted to the downside. Tariff and geopolitical uncertainty continue to cloud the outlook; higher commodity prices may help select industries but are likely to be offset by their inflationary impact on consumers; and soft real estate activity in Toronto, Vancouver, and other major urban centres is contributing to a negative wealth effect on households. For the Bank of Canada, the data is in line with their expectations and highlights the challenges to the outlook through the balance of the year.
Housing Affordability Watch
CMI monitors the latest developments and offers insights on solutions to Canada’s housing affordability crisis
Nova Scotia’s new First-time Homebuyers Program aims to improve access to ownership through lower down payments and provincial guarantees, but similar demand-side interventions elsewhere have produced mixed market outcomes.
In the latest Housing Affordability Watch, we compare the program with Australia’s expanded 5% Deposit Scheme and explore what a recent Cotality study suggests about the interaction between policy-driven demand and constrained housing supply.
Read the full analysis: https://thecmigroup.ca/press-room/nova-scotia-first-time-homebuyers-program-a-cautionary-tale/
Independent Opinion
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