Non-residential building construction saw its best month since the start of 2022, StatCan said, owing primarily to activity around a new hospital building in Toronto.<\/p>\n
StatCan also said a 1.7 per cent surge in electricity generation, transmission and distribution powered the utilities sector to its strongest month of growth all year. A July heat wave across many parts of the country drove up power demands for cooling, the agency said.<\/p>\n
On the other side, declines in July were spread across manufacturing, mining, quarrying and oil and gas extraction, as well as retail and wholesale trade.<\/p>\n
Manufacturing\u2019s 0.9 per cent decrease was the sector\u2019s first drop in four months, StatCan said.<\/p>\n
Mining and quarrying took a sharp hit in July, thanks in part to a 6.4 per cent drop in potash mining — the largest monthly decline since September 2025. July\u2019s increase in oil sands extraction tempered wider declines in oil and gas.<\/p>\n
Retailing activity meanwhile fell off at gas stations in July, which StatCan said coincided with rapidly rising gasoline prices in the peak summer travel season.<\/p>\n
Estimates for flat growth to start the third quarter come after StatCan projected an annualized growth rate of 3.3 per cent in the second quarter.<\/p>\n
Newly revised data showed GDP was actually up 0.4 per cent in June, compared with earlier estimates of 0.3 per cent.<\/p>\n
StatCan\u2019s initial estimates call for the economy to pick back up with a gain of 0.2 per cent in August, but those early figures will be revised next month.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/09\/SB2DEXIYEU5IZLUPHF7KRWPC4M.jpg\")
Transport trucks carry cargo containers to be loaded on the Hapag-Lloyd container ship Frankfurt Express at the DP World Centerm terminal at port, in Vancouver, on Sunday, Aug. 3, 2025. THE CANADIAN PRESS\/Darryl Dyck Transport trucks carry cargo containers to be loaded on the Hapag-Lloyd container ship Frankfurt Express at the DP World Centerm terminal at port, in Vancouver, on Sunday, Aug. 3, 2025. THE CANADIAN PRESS\/Darryl Dyck <\/p>\n
The agency said mining, quarrying and retail trade rebounded in the month, offset by further declines in oil and gas extraction.<\/p>\n
The August GDP figures will partially capture the impact of new 50 per cent U.S. tariffs applied on a range of Canadian goods starting Aug. 22.<\/p>\n
\u201cThe August pickup reinforces our view that the Canadian economy was enjoying a decent mid-year recovery before the latest U.S. tariffs took effect,\u201d said Peter Shannon, senior economist at KPMG, in a note.<\/p>\n
Shannon said he expects the bite from the new U.S. duties to meaningfully hit in September and take full effect in the fourth quarter. KPMG projects GDP will be about half a percentage point lower over the course of a year should the tariffs remain in effect.<\/p>\n
Benjamin Reitzes, BMO\u2019s managing director of Canadian rates and macro strategist, said in a note to clients Tuesday that the August advance has him tracking GDP growth of 1.5 to two per cent in the third quarter of the year. That\u2019s roughly in line with the Bank of Canada\u2019s forecast for 1.5 per cent in the quarter, he noted.<\/p>\n
New tariffs create some roadblocks for the economy, but Reitzes said fiscal policy changes like Ottawa\u2019s move to expand investment incentives will help support growth.<\/p>\n
\u201cThe Canadian economy continues to hang in there despite the ongoing trade headwinds,\u201d Reitzes said.<\/p>\n
The Bank of Canada will get a look at new jobs and inflation data for September, as well as a read of its own quarterly surveys of businesses and consumers, before making its next interest rate announcement on Oct. 28.<\/p>\n
Reitzes suggested these data prints will be more impactful for the central bank\u2019s decision than the July GDP release.<\/p>\n
—<\/p>\n
Craig Lord, The Canadian Press<\/p>\n
This report by The Canadian Press was first published Sept. 29, 2026.<\/p>\n
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