Statistics Canada says the Canadian economy was off to a solid start in January but early signs suggest growth hit a wall in February.
The agency said Friday that real gross domestic product rose 0.4 per cent in January thanks largely to a boom in the oil and gas, quarrying and mining industries.
That marks an acceleration from 0.3 per cent growth in December, meaning an upgrade of a tenth of a percentage point.
Canada’s goods-producing industries were particularly hot in January, rising 1.1 per cent for their biggest one-month jump in over three years.
The manufacturing, utilities and construction sectors all recorded growth in January, Statistics Canada said, and the services side of the economy also edged up 0.1 per cent.
Statistics Canada says a slowdown in retail trade weighed on GDP at the start of 2025, following strong growth in December.
The agency’s early estimates have growth essentially unchanged in February.
Andrew Grantham, senior economist at CIBC, said in a note to clients Friday that the February slowdowns are likely tied to harsh winter weather throughout Canada and the end of Ottawa’s sales tax holiday mid-month.
The uptick in January, on the other hand, could be better explained as Canadian businesses “front-running” U.S. tariffs, which were threatened regularly over the month before coming into partial effect in March.
“We expect that tariffs will have a clearer negative impact on GDP in March and during Q2,” Grantham said.
U.S. President Donald Trump is targeting automobiles made outside the U.S. in his latest round of tariffs announced Thursday.
