Canada Industrial Research Brief

New tariffs disrupt manufacturing recovery. After four consecutive months of improvement, Canada’s manufacturing sales increased at a slower annual pace, weighed down by shipments falling 1.0 per cent in October. The sector faced a renewed shock as the United States imposed tariffs on softwood lumber, resulting in a 9.0 per cent monthly drop in wood product shipments. Transportation equipment sales also fell, down 2.3 per cent, driven by weaker production of aerospace products and parts. Looking ahead, shipments in the transportation equipment sector could remain under pressure entering 2026, as new U.S. tariffs of 25 per cent on medium- and heavy-duty trucks and 10 per cent on buses took effect in November. Moreover, ongoing efforts by several automakers to move parts of production capacity south of the border could further strain the sector, affecting overall sales in the short term.