Canada GDP Research Brief

Growth rebounded on trade swings. Canada’s GDP expanded at a 2.6 per cent annualized pace in the third quarter, far surpassing market expectations for a 0.5 per cent increase. The upside surprise was driven largely by an 8.6 per cent pullback in imports and a 12.2 per cent jump in government investment. However, private sector demand remained subdued. Business investment in nonresidential structures, equipment and machinery fell 4.5 per cent, reflecting businesses’ limited appetite to expand operations amid trade uncertainty. Intellectual property investment also declined 2.4 per cent, indicating that the economy has yet to experience a meaningful boost from AI-related investment. Household spending also slipped 0.4 per cent, as a 2.0 per cent drop in goods consumption outweighed a modest 0.7 per cent increase in services.