Canada’s economy is growing, but you’re forgiven if you didn’t notice—you probably work in the majority of industries that didn’t grow. Statistics Canada (StatCan) data reveals real gross domestic product (GDP) increased in February. A minority of industries drove that growth, with finance also getting a boost from loans and mortgages. Separately, the agency released payroll data showing fewer jobs accompanied that credit-driven growth.
Canadian Real GDP Grew, But Most Industries Didn’t
Canadian real GDP by industry: Contribution to growth in February 2026, by sector.
Source: StatCan.
Canadian real GDP grew 0.2% in February, marking the fourth consecutive month of growth. Goods (+0.4% m/m) drove the growth, while services climbed just 0.1% over the same period. The headline shows growth, even if it was minor. However, just 8 of 20 sectors grew, meaning most of the economy stalled (or worse).
March won’t be finalized until next month, but StatCan’s flash estimate shows flat growth. It’s a bold call—higher energy prices will boost some sectors, while elevated inflation will drag others.
Accounting for March’s flat estimate, StatCan believes real GDP grew 0.4% in Q1 2026—1.7% annualized growth. BMO Capital Markets explains this is higher than the 1.5% they had forecast, but it wasn’t entirely good news.
“… only 8 of 20 sectors grew in the month, highlighting that the economy continues to struggle despite the decent headline,” explains Benjamin Reitzes, Managing Director of Canadian Macro Strategies. “Unfortunately, the flat March provides a tougher handoff for Q2, so unless we get a strong April, expect some deceleration in GDP growth.”
Manufacturing Drove GDP, Largely Due To Delayed Activity
Canadian real GDP by industry: Manufacturing.
Source: StatCan.
Manufacturing led growth as it climbed 1.8% in February, following a 1.3% drop in January. The sector remains 3.3% smaller than last year, and the bounce was due to vehicle plants. “Several auto assembly plants in Ontario were in the process of ramping-up production, following shutdowns related to model-change, retooling and assembly-line maintenance in January,” said StatCan.
February’s real GDP was also boosted by wholesale trade (+0.9% m/m), which remains 1.9% lower than last year. Transportation and warehousing also grew 1.2% in the month, 4.5% higher than last year. StatCan says this was partially due to freight and transborder flows, suggesting easing tensions.
Finance Sector Grows On Borrowing, Payrolls Show Fewer Jobs
The Finance and insurance sector also climbed 0.3% in February, up 2.9% from last year. The agency notes it was helped by rising loan and mortgage activity, also noting a boost from banking, monetary authorities, and depository credit intermediation. Debt is back with a fury, even if real estate sales aren’t even close to returning to normal.
Contrast that with another StatCan release today—SEPH payroll data. It shows payroll employment fell 0.3% (-60.2k jobs) in February, more than reversing January’s gain. Finding a job is also getting harder, with just 497,200 vacant roles, 5.5% lower than last year.
“The BoC characterized the job market as ‘soft’ and that looks right on,” said Reitzes. Adding, “that would be more concerning if GDP didn’t just come in at +0.2%.”
Real GDP may have grown but this is far from a growth story. Fewer than half of the industries grew in the month, and the strongest gains came with caveats. One of the biggest growth drivers was delayed January activity, not material growth. However, the most damning part of today’s data is credit-driven growth while jobs fall.
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