Canada economy edges up as GDP rises in January

Statistics Canada reported GDP rose 0.1% in January to C$2.343 trillion, and advance data indicate an estimated 0.2% gain in February, which would mark three months of expansion.

Economic activity in Canada remained positive in the early months of 2026 as GDP rose 0.1% in January. Statistics Canada said the level of GDP reached 2.343 trillion Canadian dollars, about US$1.682 trillion. Advance data for February indicate a further estimated gain of 0.2%, matching December's pace. If the estimate holds, it would be the first three-month expansion since late 2024. Key facts: - GDP increased 0.1% in January to C$2.343 trillion (about US$1.682 trillion). - Advance data show an estimated 0.2% rise in February, which would follow December's 0.2% gain. - Growth in January was driven by a second straight monthly expansion among goods producers, while services-producing industries were essentially unchanged. - Mining and oil and gas extraction rose, supported by higher natural gas output and increased crude petroleum extraction in Newfoundland and Labrador and Saskatchewan. - Manufacturing contracted 1.4% in January, with the automotive sector seeing its largest retreat since September 2021 after extended winter shutdowns at Ontario assembly plants. - Construction expanded for a third month; retail trade and finance and insurance also posted gains, while wholesale trade weakened and real estate and rental activity declined for the first time in 10 months. Summary: Three months of expansion would indicate modest momentum in the first quarter of 2026, helped by resource production and construction. At the same time, manufacturing weakness and trade uncertainty related to U.S. policy shifts and the renegotiation of the Canada-Mexico-U.S. pact are affecting the outlook. The Bank of Canada has said it expects modest growth as it assesses the effects of tariffs and the conflict in the Middle East. Undetermined at this time.