Real GDP fell 1.6% on an annualized basis in the second quarter, based on data from Statistics Canada.
Similarly, TD Bank’s Maria Solovieva said July’s numbers helped steady the economy. GDP grew by 0.2% in July, ending three months of no growth. She added that August’s early estimate showed no change, but if September also holds steady, Canada will likely avoid a technical recession.
Despite the positive forecast, the report highlighted that sector-specific tariffs imposed by the US continue to weigh on Canada’s manufacturing industries.
Still, the country’s relatively low average US tariffs compared to other nations have helped minimize the damage.
Meanwhile, the federal government quietly dropped more counter-tariffs on US goods than first announced. An online order-in-council showed that, last month, all Canadian retaliatory tariffs were removed except those on steel, aluminum, and autos.