Canada’s economy stalled for a second straight month. Statistics Canada reported on October 30 that real GDP was “essentially unchanged” in August 2026, following a flat July — a result that missed economists’ expectations of 0.2% growth, in line with the agency’s earlier flash estimate.
The details show an economy running on fumes. Goods-producing industries edged up 0.1%, but services-producing industries slipped 0.1%, and only 9 of 20 sectors expanded. Retail trade grew 1.2%, led by motor vehicle and parts dealers, and manufacturing rose 0.3% — but wholesale trade fell 1.4% on fewer auto imports, and public administration weighed on the total.
Worse may lie ahead. Statistics Canada’s advance estimate puts September GDP down 0.1% — a preliminary figure, subject to revision. If it holds, third-quarter growth would come in around 1.3% annualized, well below the Bank of Canada’s 2% October forecast.
Analysts urged caution about reading too much into the noise. KPMG economist Ali Jaffery called the data “very noisy,” noting that temporary forces may unwind in the fourth quarter; KPMG projects 1.5% annualized growth in Q3 slowing to 1.4% in Q4 as U.S. tariffs bite. Fellow KPMG economist Peter Shannon added that consumers remain strong but trade-exposed industries are losing steam.
Notably, much of the August data pre-dates the late-August tariff escalation — September will be the first full month under the new U.S. duties. Official September and third-quarter income-and-expenditure estimates are due November 30, and they will give the first full picture of how the trade war is hitting Canada’s economy.
The flat August print also keeps pressure on Ottawa’s economic narrative. With retail spending led by car purchases and manufacturing barely growing, recent momentum looks increasingly like it was borrowed from resilient consumers rather than broad-based strength. If September’s preliminary 0.1% decline is confirmed — the first full month under the new U.S. tariffs — the Bank of Canada’s 2% forecast could be out of reach, and the November 30 income-and-expenditure report will be the first true measure of the trade war’s bite.
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Bhudev Bhagaliya is an experienced and senior journalist who has carved a distinct niche for himself in the world of Hindi journalism through his profound understanding and precise writing style. With over two decades of experience in the field of journalism, he has held key responsibilities at Dainik Hindustan for 12 years and at Amar Ujala for one year. Currently, he serves as the Content Editor for the Jagrook Youth News newspaper and portal, where he plays a crucial role in ensuring the quality and credibility of the news content. Bhudev Bhagaliya consistently writes about issues that help raise awareness within society and among the younger generation.