StatCan: GDP growth masks weakness in Canada’s economy

Canada’s Q3 GDP Growth Conceals Underlying Economic Fragility

Key Data and Reactions

Statistics Canada reported that Canada’s economy expanded at an annualized rate of 2.6 percent in the third quarter of 2025. This stronger-than-expected result surprised economists, who had anticipated slower momentum following a sluggish first half of the year.

Economists, however, cautioned that the headline growth figure hides deeper structural weaknesses. Much of the expansion came from temporary factors such as a rebound in exports and higher inventory accumulation, not from sustained domestic demand.

Underlying Concerns

Several analysts noted that household consumption remained muted amid high interest rates and persistent cost-of-living pressures. Business investment also softened, signaling uncertainty about future growth.

Benjamin Reitzes, an economist at BMO Capital Markets, said:

“The headline looks good, but beneath the surface, the economy is far from robust.”

Broader Economic Context

Canada’s labor market has begun to cool, wage growth slowed, and consumer spending moderated as households faced rising debt-servicing charges. These signs suggest that the stronger GDP number may not translate into long-term strength.

Economists expect slower growth heading into early 2026 as the effects of elevated borrowing costs and global uncertainties continue to weigh on the economy.

Author’s summary: Though Canada’s Q3 GDP beat expectations with 2.6% growth, economists warn that weak consumer spending and investment underline a fragile economic foundation.

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BNN Bloomberg BNN Bloomberg — 2025-11-28

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