{"id":364396,"date":"2025-12-23T19:50:12","date_gmt":"2025-12-23T19:50:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/364396\/"},"modified":"2025-12-23T19:50:12","modified_gmt":"2025-12-23T19:50:12","slug":"canadas-economy-to-end-year-on-weak-footing-after-tariff-turmoil","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/364396\/","title":{"rendered":"Canada\u2019s economy to end year on weak footing after tariff turmoil"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Carpenters build a log home made from white pine in Salaberry-de-Valleyfield, Que., in October. U.S. President Donald Trump announced tariffs on lumber and other wood products in late September.Christinne Muschi\/The Canadian Press<\/p>\n

While Canada\u2019s economy likely rebounded slightly last month after a widespread contraction in October, the fourth quarter is shaping up to be a weak one as tariff-hit industries weigh on growth. <\/p>\n

Industry-based gross domestic product expanded 0.1 per cent in November, according to a preliminary estimate from Statistics Canada, coming on the heels of a 0.3-per-cent decline the month before.<\/p>\n

Together, the two months of data suggest that the Canadian economy \u201chas some work cut out to avoid another negative print for the final quarter of the year,\u201d said Robert Kavcic, senior economist at BMO Capital Markets, in a note to clients. \u201cThat will close out a very choppy year for Canadian growth in still-choppy fashion.\u201d<\/p>\n

While that contraction in October was expected, the breadth of the decline still caught the attention of economists.<\/p>\n

Let 2026 be the year Canada becomes investable again<\/a><\/p>\n

Carney says U.S.-Canada trade deal unlikely to happen in near future<\/a><\/p>\n

Output fell in many sectors, with manufacturing, which contracted 1.5 per cent, contributing the most to the month-over-month decline.<\/p>\n

Within manufacturing, most sectors were flat or down, with the biggest declines coming in trade-dependent industries such as electrical equipment, machinery and wood-product manufacturing. <\/p>\n<\/p>\n

The latter has been hit particularly hard, with output from wood-product manufacturers shrinking 7.3 per cent in October.<\/p>\n

Canada\u2019s softwood lumber sector has sounded the alarm that producers face enormous challenges during a period of high U.S. import taxes, warning of widespread effects on the communities and employees that depend on mills.<\/p>\n

U.S. import taxes on softwood currently total 45.16 per cent on most Canadian producers, including anti-dumping and countervailing duties of 35.16 per cent and new tariffs of 10 per cent. The duty rates were 14.4 per cent previously.<\/p>\n

U.S. President Donald Trump announced the tariffs on lumber and other wood products in late September against Canada and other countries, effective Oct. 14. He cited Section 232 of the U.S. Trade Expansion Act, which allows him to invoke national security concerns to impose tariffs.<\/p>\n

Education services also added to the monthly output drop in October, but that was largely due to the teachers strike in Alberta. <\/p>\n

The monthly GDP numbers paint a picture of an economy steadily losing attitude. Compared to a year ago, real output in October grew just 0.4 per cent, Mr. Kavcic noted, the slowest pace since the pandemic. <\/p>\n<\/p>\n

Even so, Canada has shown more resilience this year than many economists expected. In the third quarter, covering July to September, Canada\u2019s real expenditure-based GDP came in at a surprisingly strong<\/a> annualized rate of 2.6 per cent.<\/p>\n

The same goes for the U.S. economy, which beat expectations to grow by 4.3 per cent in the third quarter, the biggest gain in two years, new numbers released Tuesday show.<\/p>\n

Households were a big driver of that growth, despite tariffs raising the prices of some goods, with U.S. consumption climbing at a 3.5-per-cent annualized rate in the quarter. <\/p>\n

\u201cEven as consumption take the reins back from investment, the economy maintains considerable momentum,\u201d said Paul Ashworth, chief North America economist at Capital Economics, in a note to clients.<\/p>\n

However, growth in the U.S. is also expected to slow in the fourth quarter because of the 43-day government shutdown.<\/p>\n

It\u2019s unclear yet how the latest data will sway central bank interest rate decisions in either country. <\/p>\n<\/p>\n

The Bank of Canada held its benchmark policy rate<\/a> at 2.25 per cent earlier this month, with Governor Tiff \u200cMacklem citing the country\u2019s resilience to U.S. tariffs and an inflation rate close to the bank\u2019s 2-per-cent target. <\/p>\n

Strong job growth in Canada has been a marker of that resilience. Last month employers added<\/a> 54,000 new jobs, which sent the unemployment rate down 0.4 percentage points to 6.5 per cent. It was the third consecutive month of employment gains. <\/p>\n

Still, it\u2019s unclear how long Canada\u2019s job market resilience can hold. The \u201cunimpressive rebound\u201d in November\u2019s monthly GDP stands in contrast with a robust jobs report for that month, \u201csuggesting that the labour market data may weaken again ahead,\u201d said Andrew Grantham, a senior economist with CIBC Capital Markets, in a note to clients.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Carpenters build a log home made from white pine in Salaberry-de-Valleyfield, Que., in…\n","protected":false},"author":2,"featured_media":364397,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[901,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,44,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-364396","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-news","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/364396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=364396"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/364396\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/364397"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=364396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=364396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=364396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}