EDITOR’S NOTE: An earlier version of this story said the GDP growth was 0.6 per cent. The real GDP growth by expenditure was 0.6 per cent. The total annualized GDP growth was 2.6 per cent. This additional information has been added.
Canada’s economy grew in the final months of 2024, even as the shadow of U.S. President Donald Trump‘s threatened tariffs looms over the country.
Statistics Canada said Canada’s GDP grew by 2.6 per cent in the fourth quarter of 2024, compared to 0.5 per cent in the third quarter.
This was led by household spending, which saw a quarterly increase of 1.4 per cent – the strongest growth since the second quarter of 2022.
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Statistics Canada added that household spending rose by 2.4 per cent in 2024, led largely by Canadians buying new trucks, vans and sport utility vehicles, as well as expenditures on rent, telecommunication services and financial services.
Canada’s construction sector saw residential construction increase by 3.9 per cent, the largest quarterly increase since the first quarter of 2021.
Canada’s export sector is expected to take an immediate hit if Trump hits Canada with tariffs next week, however the sector had a strong fourth quarter in 2024. The export of goods and services rose 1.8 per cent.
In 2024, exports of goods and services rose 0.6 per cent. This was led by higher exports of crude oil and bitumen, followed by travel services and pharmaceutical and medicinal products.
The GDP estimates come just days before Trump’s sweeping tariffs on Canada are scheduled to go into effect. Several economists, including Bank of Canada governor Tiff Macklem, have said broad-based tariffs by the United States would be devastating for Canada’s economy.
“In the pandemic, we had a steep recession followed by a rapid recovery as the economy reopened,” Macklem said last week. “This time, if tariffs are long-lasting and broad-based, there won’t be a bounceback.”
Macklem said while Canada could recover part of the growth, the damage would be long-lasting.
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