By Melissa Shin
(Bloomberg) — The Canadian financial system continues to show resilience regardless of U.S. tariffs, with preliminary estimates displaying a small enlargement final month.
Trade-based gross home product grew by 0.1% in November, in line with a flash estimate from Statistics Canada on Tuesday. It had fallen by 0.3% in October, matching the month-to-month contraction anticipated in a Bloomberg survey of economists.
Charles St-Arnaud, chief economist at Servus Credit score Union, stated his evaluation suggests the financial system will shrink by 0.2% within the fourth quarter, pointing to “the weak start line to This autumn and the dearth of rebound in November.”
“The Canadian financial system is skating on skinny ice in This autumn,” stated Michael Davenport, senior Canada economist with Oxford Economics. “Though the financial system averted a technical recession in 2025, we count on weak underlying momentum to hold by means of H1 2026.”
The manufacturing sector fell 1.5% in October, largely offsetting an enlargement from the earlier month, primarily as a result of a drop in equipment manufacturing. Wooden product manufacturing recorded its largest decline since April 2020, reflecting manufacturing slowdowns after the U.S. authorities imposed further tariffs on Canadian lumber starting Oct. 14.
Labour disruptions additionally contributed to October’s contraction. Strikes by lecturers in Alberta, authorities staff in British Columbia and postal staff nationally decreased exercise within the public sector, alcohol retailers, and transportation and warehousing, respectively.
Mitigating the general GDP drop was the finance and insurance coverage sector, which rose 0.4% in October in its fifth consecutive month-to-month enhance.
“The subdued November rebound means that the Canadian financial system has some work minimize out to keep away from one other destructive print for the ultimate quarter of the yr,” stated Robert Kavcic, senior economist with Financial institution of Montreal, in a consumer word.
Tuesday’s report “exhibits that financial exercise stays risky in Canada,” St-Arnaud stated. “The modest development in latest months can be considerably at odds with the power within the labour market, which noticed robust job creation in latest months.”
The Financial institution of Canada stored its coverage rate of interest at 2.25% on Dec. 10, calling the financial system “resilient general” however warning of elevated uncertainty.
Governor Tiff Macklem additionally signalled that the financial institution will proceed to carry charges regular within the close to time period, absent any surprises to its outlook.
–With help from Mario Baker Ramirez and Laura Dhillon Kane.
©2025 Bloomberg L.P.
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Final modified: December 23, 2025
