Canada’s economy is growing faster than expected despite flat growth in the latest GDP report. Statistics Canada (StatCan) data shows gross domestic product (GDP) growth flat in July. Growth reported for half of sectors was offset by a contraction in the other half. New accompanying revisions show previous months had higher output than initially reported, leaving the economy in a better place.
Canadian GDP Growth Flatlines, Revisions Provide Slight Boost
Source: StatCan.
Canadian GDP was essentially unchanged in July, following the upwardly revised 0.4% growth in June. The latest revisions also show the economy grew 0.1% more than previously reported from January to June 2026. While it’s within normal statistical tolerances, it’s worth noting since the revisions represent roughly 10% of total growth in this period.
Half of Canada’s GDP Sectors Grew, Half Shrank
Growth was flat, but industry was split—half of the 20 industrial sectors contracted while the other half grew. The biggest drags on growth were manufacturing (-0.9%), retail (-1.0%), and mining, quarrying, and oil and gas extraction (-0.5%). The surge in construction (+1.3%) and utilities (+1.7%) offset the huge plunge in those industries.
Construction Activity Surges On Government Building In Ontario
Construction’s 1.3% growth in July is one of the biggest takeaways, adding the equivalent of 0.09 points of growth to total GDP. It marked the fourth consecutive advance for the segment, offsetting the declines from late 2025 and early 2026. Non-residential activity led the segment, driven largely by work on a single new hospital in Ontario that sent it soaring. This suggests a less impactful long-term boost in this area, as it was driven by non-market factors.
Brief Relief From GDP Growth Slump Expected In Next Report
The slump isn’t expected to extend into the next report, according to the agency. StatCan’s advance estimate shows 0.2% growth for August 2026, driven by a retail and mining rebound. The near-term gains are expected to be offset by a continued drop in oil and gas extraction. The official release won’t be until October 30th.
The escalation of the trade war took effect at the end of August, so its impact will be limited in that report. The full impact won’t be shown until September’s GDP report, and it’s unlikely to be flattering.
