Canadian Retail Sales Flat at $67.6 Billion in November; Early Estimate Points at December Rebound

Canadian retail sales in November were flat compared to October, but an early estimate by Statistics Canada suggests a rebound in December, which saw the start of Ottawa’s GST/HST holiday.

The agency reported overall retail sales totaling $67.6 billion in November, relatively unchanged from October. If the preliminary estimate of a 1.6% gain in retail sales in December holds, it would be the largest gain in two years.

The Bank of Montreal senior economist Shelly Kaushik said that a disappointing November showing for retail sales was likely coloured by timing, as a late Black Friday and a mid-December start to the GST/HST holiday kept consumers on the sidelines in the latter part of the month. A solid December flash estimate and an otherwise decent showing in the second half of the year support that view.

Ottawa announced a temporary GST/HST break on certain items ahead of the busy holiday shopping season. Lower policy rates should continue to support spending in 2025, but the uncertain trade environment could add meaningful headwinds.

Source: Globe and Mail
Source: The Star
Source: Statistics Canada

Canada’s Economy Grew 1.4% in 2024, Early Estimates Show

The Canadian economy showed signs of life at the end of 2024, Statistics Canada said, despite stumbles in November. Initial estimates show that real GDP grew 0.2 percent in December, thanks in part to the beginning of the federal government’s GST/HST “holiday.”

StatCan cautions that these early estimates for December will be revised next month. But if those figures hold, StatCan says the Canadian economy would have grown 1.4 percent in 2024.

Canadian Imperial Bank of Commerce senior economist Andrew Grantham believes that November’s contraction does not set up Canada’s economy well for a shock from U.S. tariffs, as risks to the future outlook have intensified due to tariff threats. The lack of economic momentum toward the end of last year and the negative impact of potential tariffs on the future outlook lean towards further interest rate cuts from the Bank of Canada.

The slowdown in November was driven largely by declines in the transportation and warehousing sector, with output decreasing by 1.3%. Goods-producing industries also experienced a decline in activity, contracting by 0.6%, with mining, quarrying, and oil extraction falling by 1.6%.

Interest rate-sensitive areas of the economy experienced some positive growth, with real estate, rental, and leasing growing by 0.3% during the month, the seventh consecutive monthly increase. The construction sector also increased by 0.7%, driven by higher activity in residential and non-residential construction.

Leisure-related sectors also saw growth in November, with the accommodation and food sector growing by 1.4%, the largest increase since January 2023, and arts, recreation, and entertainment increasing by 0.8%.

Source: Globe and Mail
Source: Financial Post
Source: Statistics Canada