Canada’s GDP contracted 0.3 per cent in August: Statistics Canada

Canada’s real gross domestic product contracted 0.3 per cent in August, offsetting 0.3 per cent gains reached in July, according to Statistics Canada.

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Canada’s real gross domestic product contracted 0.3 per cent in August, offsetting 0.3 per cent gains reached in July, according to Statistics Canada.

The GDP reduction was primarily driven by decreases in goods-producing and services-producing industries.

“Goods-producing industries declined 0.6 per cent in August, marking this aggregate’s fifth contraction since the beginning of the year,” reads the data. “Services-producing industries edged down 0.1 per cent, marking this aggregate’s first decline in six months, driven by contractions in transportation and warehousing and in wholesale trade.”

Air transportation also saw its largest drop since the COVID-19 pandemic in August, down 4.6 per cent. This was due to 10,000 flight attendants striking mid-August, resulting in flight cancellations.

The strike also affected other areas of the transportation sector, with support activities for transportation dropping by 1.9 per cent, its largest decrease since January 2022.

Overall, the transportation and warehousing sector declined 1.7 per cent in August, more than offsetting July’s expansion.

Additionally, pipeline transportation fell by 0.7 per cent due to lower pipeline transportation of natural gas (-2.6 per cent), coinciding with lower exports to the United States.

The wholesale trade sector saw its first decline in August after three consecutive months of expansion, driven by a major drop in motor vehicle and parts wholesalers (-8.3 per cent).

Food, beverage and tobacco wholesalers also saw a sizeable drop of 5.2 per cent, marking the sector’s largest monthly contraction rate since November 2022.

Mining, quarrying, and oil and gas extraction also fell, partially offsetting back-to-back increases the sector enjoyed in June and July.

However, oil and gas extraction helped temper the decline, expanding for the third month in a row in August with increased extractions of crude petroleum in Alberta and Newfoundland and Labrador.

Meanwhile, the utilities sector contracted 2.3 per cent in August, with “widespread declines across all industries comprising the subsector.”

“Electric power generation, transmission and distribution (-2.4 per cent) accounted for most of the decline in August, recording its sixth consecutive monthly decline, as worsening drought conditions hampered hydroelectric power generation,” it said.

The same was true of the manufacturing sector, which experienced a slight contraction across durable and non-durable manufacturing industries.

“Non-durable manufacturing decreased 0.2 per cent with the majority of subsectors contracting in August. Food manufacturing (-1.3 per cent) contributed the most to the decrease, followed by beverage and tobacco manufacturing (-4.7 per cent).”

However, the retail trade sector saw gains in eight of its 12 subsectors, driven by motor vehicle parts dealers. The increase was most noticeable in new and used car dealers as well as automotive parts, accessories and tires retailing.

August also marked a rebound in general merchandise stores, clothing and clothing accessories stores and sporting goods, hobby, book and music stores.

Statistics Canada estimates that real GDP increased 0.1 per cent in September based on advanced information.

“Increases in finance and insurance, mining, quarrying, and oil and gas extraction, and manufacturing were partially offset by decreases in wholesale trade and retail trade,” it said. “Owing to its preliminary nature, this estimate will be updated on November 28, 2025, with the release of the official GDP by industry estimates for September.”