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Canada’s GDP fell 0.3 per cent in October, which more than offset September’s increase of 0.2 per cent.
Statistics Canada reported Tuesday on gross domestic product (GDP), and that the manufacturing sector led the declines with a 1.5 per cent drop. Machinery manufacturing was down 6.9 per cent, and contributed the most to the category’s negative output.
Overall, 11 out of 20 industries saw a drop in productivity, according to the agency.
GDP is a measure of the total value of all goods and services produced in a country during a given period.
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Manufacturing of wood products dropped 7.3 per cent in October, which Statistics Canada says was the largest decline since April 2020, while sawmills and wood preservation productivity fell nine per cent.
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Statistics Canada said October’s weakness in wood manufacturing and its subsectors were “following the announcement from the U.S. government of additional tariffs on Canadian lumber effective Oct. 14.”
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In October, U.S. President Donald Trump imposed additional tariffs of 10 per cent on imports of softwood timber and lumber, plus a 25 per cent tariff on some furniture products and parts. The B.C. Lumber Trade Council said at the time that some Canadian softwood lumber entering the U.S. would face tariffs and duties totalling over 45 per cent.
Although previous data shows the economy still managed to avoid a technical recession in 2025 — which is where GDP drops for two straight quarters, or a six-month period — the Bank of Canada has warned that the trade war and U.S. tariffs will continue to weaken the economy and lower productivity.
Tuesday’s economic data from Statistics Canada marks the final major release for 2025.
The Bank of Canada tracks GDP, as well as labour market and inflation reports, to determine when or if it needs to change its benchmark interest rate.
– More to come
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