The Canadian economy shrank in the third quarter as higher rates weighed on consumer and business spending, but has so far managed to skirt a recession after a significant upward revision to second quarter GDP figures.
Statistics Canada released its gross domestic product report Thursday, which shows the economy contracted 1.1 per cent on an annualized basis.
It also revised up its reading for real gross domestic product in the second quarter, noting the economy did not shrink, but rather grew 1.4 per cent on an annualized basis.
While the decline in the third quarter was offset by growth in the second quarter, economists reacting to the new data say the trend is clear: the economy is teetering.
"The big picture is that the Canadian economy is struggling to grow, yet managing to just keep its head above recession waters," wrote BMO chief economist Douglas Porter in a client note.
The federal agency says a decrease in international exports and slower inventory accumulation by businesses were partially offset by increases in government spending and housing investment in the third quarter.
It also reported new housing construction in the quarter increased for the first time since early 2022, led by apartment construction.
Bank of Canada interest rate hikes have been putting pressure on consumer and business spending as they both face higher borrowing costs.
Thursday's report shows consumer spending continues to be flat for a second consecutive quarter.
Households are instead saving more as disposable income surpassed the rise in nominal spending.
The report says government transfers, namely the doubling of the GST rebate in the summer, propped up incomes as the labour market weakened.
Meanwhile, business capital investment fell by two per cent in the third quarter.
TD director of economics James Orlando noted there were one-off factors that affected the economy in the third quarter, such as the B.C. port strike and widespread wildfires.
"Some of the weakness that we got in summertime seems to be bouncing back a little," Orlando said.
Statistics Canada's preliminary estimate for real GDP in October suggests the economy grew 0.2 per cent, following a 0.1 per cent increase in September.
The Bank of Canada has been striving to pull off a soft landing, meaning higher interest rates slow the economy just enough to bring down inflation but not to the point of a recession.
Orlando says Canada appears to be experiencing a soft landing right now as the country averts a sharper downturn.
"If you asked me two years ago, 'How would the Canadian economy respond, given we have high consumer debt loads, and the fact that the Bank of Canada raised interest rates from, like, zero to five per cent' ... most people thought we would've had a serious recession by now. And we haven't," Orlando said.
Canada's inflation rate has fallen from a high of 8.1 per cent in the summer of 2022 to 3.1 per cent in October.
The central bank is set to announce its next interest rate decision on Dec. 6, after choosing to hold its key rate steady at five per cent at its last two announcements.
Economists widely expect the Bank of Canada to remain on hold as inflation slows and the economy weakens.
"Today's mixed report reinforces the point that the Bank is done hiking rates, but doesn't really advance the cause for rate cuts, as the economy isn't showing signs of further deterioration early in Q4," Porter said.
The Bank of Canada has doubled down on its willingness to raise rates further if inflation doesn't come down fast enough and has brushed off any discussion of rate cuts down the line.
Statistics Canada will be releasing its November labour force survey on Friday, which will offer economists more insight on whether economic momentum has continued to slow.
This report by The Canadian Press was first published Nov. 30, 2023.
As Americans prepare to elect their next president on Tuesday, new data from the Angus Reid Institute suggests Canadians hold differing views as to which federal party leaders would be best suited to deal with either Donald Trump or Kamala Harris.
Employers at British Columbia ports say they are going ahead with locking out more than 700 foremen across the province after strike activities from union members began.
A frustrated Taylor Swift fan is speaking out after being pushed from a short-term rental she booked for the upcoming Vancouver leg of the superstar’s Eras Tour.
A campaign that has careened through a felony trial, incumbent being pushed off the ticket and assassination attempts comes down to Election Day on Tuesday.
A measles outbreak declared in New Brunswick’s Zone 3 last week, which includes Fredericton and the upper Saint John River Valley, has more than doubled since last week.
In handing down the sentences for two London parents, Justice Thomas Heeney told the court, "The facts of this case were the most egregious that I have encountered during my 26 years on the bench."
A year ago, Lorraine O'Quinn was coping with stress, chronic illness and Type 2 diabetes. Then she discovered a health program that she says changed her life.
Based on victories in the past two elections and polls leading up to Tuesday’s election, Donald Trump had seemed almost certain to win Iowa, but a new poll has Kamala Harris with a sudden three-point lead.
Incendiary devices that ignited in Germany and the United Kingdom in July were part of a covert Russian operation that aimed to start fires aboard cargo and passenger flights heading to the U.S. and Canada, the Wall Street Journal (WSJ) reported Monday, citing Western security officials.
A B.C. man who raped a teenage girl, shared photos of her, and boasted to his friends about his crimes in a group chat, lost his bid to have the case tossed over delays and has been sentenced.
More than 230,000 households and businesses in British Columbia were without electricity Monday during the peak of a storm during which heavy rains and strong winds downed power lines.
Natalie Anderson remembers the last time she saw nine-month old Xavia Butler in person.
A measles outbreak declared in New Brunswick’s Zone 3 last week, which includes Fredericton and the upper Saint John River Valley, has more than doubled since last week.
Some Lebanese-Canadians are pressuring the federal government to implement emergency measures that would allow Lebanese nationals' family members a less restrictive gateway to Canada, citing more 'flexible' policies for Ukrainians.
In handing down the sentences for two London parents, Justice Thomas Heeney told the court, "The facts of this case were the most egregious that I have encountered during my 26 years on the bench."
North Korea on Tuesday fired multiple short-range ballistic missiles toward its eastern sea, the South Korean military said, as the country continued its weapons demonstrations hours before the U.S. presidential election.
A UN spokesperson warned “there is no alternative” to UNRWA, adding that Israeli authorities maintain responsibility to provide for the population in Gaza.
Incendiary devices that ignited in Germany and the United Kingdom in July were part of a covert Russian operation that aimed to start fires aboard cargo and passenger flights heading to the U.S. and Canada, the Wall Street Journal (WSJ) reported Monday, citing Western security officials.
Nigeria’s President Bola Tinubu on Monday ordered the immediate release of 29 children facing the death penalty after being arraigned for allegedly participating in protests against the country’s worst cost-of-living crisis in a generation.
Robert F. Kennedy Jr. waded into another scientific debate on Saturday by saying Donald Trump’s administration would advise that fluoride be removed from the country’s water supplies if the former president wins Tuesday’s presidential election. Here’s what health experts are weighing as the public health practice of adding fluoride to America’s water supply comes under increased scrutiny.
Based on victories in the past two elections and polls leading up to Tuesday’s election, Donald Trump had seemed almost certain to win Iowa, but a new poll has Kamala Harris with a sudden three-point lead.
As Americans prepare to elect their next president on Tuesday, new data from the Angus Reid Institute suggests Canadians hold differing views as to which federal party leaders would be best suited to deal with either Donald Trump or Kamala Harris.
Some Lebanese-Canadians are pressuring the federal government to implement emergency measures that would allow Lebanese nationals' family members a less restrictive gateway to Canada, citing more 'flexible' policies for Ukrainians.
Murray Sinclair, who was born when Indigenous people did not yet have the right to vote, grew up to become one of the most decorated and influential people to work in Indigenous justice and advocacy.
A measles outbreak declared in New Brunswick’s Zone 3 last week, which includes Fredericton and the upper Saint John River Valley, has more than doubled since last week.
New research from the University of Oregon finds the annual practice of ‘springing forward’ into daylight time affects productivity more than previously thought.
A year ago, Lorraine O'Quinn was coping with stress, chronic illness and Type 2 diabetes. Then she discovered a health program that she says changed her life.
Elon Musk’s X has been modified so that accounts you’ve blocked on the social media platform can still see your public posts.
Three Chinese astronauts returned to Earth on Monday after a six-month stay on the Tiangong space station, part of China's effort to be a global leader in space exploration.
Talented though they may be, monkeys will never type out the complete works of William Shakespeare, or even a short book, a new study suggests.
A frustrated Taylor Swift fan is speaking out after being pushed from a short-term rental she booked for the upcoming Vancouver leg of the superstar’s Eras Tour.
After decades in romantic comedies, Hugh Grant has spent the last few years playing narcissists, weirdos and murders, often to the greatest acclaim of his career.
Quincy Jones, the multi-talented music titan whose vast legacy ranged from producing Michael Jackson's historic 'Thriller' album to writing prize-winning film and television scores and collaborating with Frank Sinatra, Ray Charles and hundreds of other recording artists, has died at 91.
Employers at British Columbia ports say they are going ahead with locking out more than 700 foremen across the province after strike activities from union members began.
Canada's housing agency says risks remain in the mortgage market as over a million contracts are up for renewal next year while a growing share of new mortgages are being issued by alternative lenders.
State police have destroyed tens of thousands of pounds of marijuana plants at greenhouses in northwestern New Mexico, marking what regulators say is the largest seizure and destruction of cannabis in New Mexico since new possession and cultivation laws took effect in 2021.
For tourists returning from vacation, a camera roll full of photos and a suitcase bursting with souvenirs are usually the closest they can come to bringing a piece of their holiday destination home with them.
A man who took in an orphaned squirrel and made it a social media star vowed Saturday that New York state's decision to seize and euthanize the animal 'won't go unheard.'
Mandy Suess was so certain the red-haired man she met at Oktoberfest was special that she got on a plane to go and find him
Retired Eagles center Jason Kelce apologized during ESPN's pregame show Monday night after grabbing the phone of an unruly fan and spiking it to the ground before the Ohio State-Penn State game last weekend.
The International Ice Hockey Federation is preparing a proposal to add 3-on-3 hockey to the Winter Olympics as soon as 2030 in the French Alps, following the same expansion that basketball has had over the past two Summer Games.
The New Orleans Saints fired coach Dennis Allen on Monday, a day after a loss at last-place Carolina extended the Saints' losing streak to seven games, their longest since 1999.
Toronto police say 59 suspects are facing a total of 300 charges in connection with an auto theft and re-vinning probe.
Several Ford vehicles have been recalled in Canada due to issues with braking systems, steering and child car seat tethers.
Ten-thousand hand-knit poppies were taken from the Sanctuary Arts Centre and displayed on the fence surrounding the Dartmouth Cenotaph on Monday.
A Vancouver man is saying goodbye to his nine-to-five and embarking on a road trip from the Canadian Arctic to Antarctica.
A Windsor teen’s social media post showing off a distinctive Windsor pizza topping has gone viral, drawing millions of views worldwide and sparking new curiosity about Windsor-style pizza.
Auston Matthews has come face to face with his look-alike. On Thursday, the Maple Leafs star met seven-year-old Grayson Joseph, who went viral for dressing up as an Auston Matthews hockey card.
A Halifax junk remover shares some of his company’s strangest discoveries.
When Leah arrived at work directing traffic around a construction site, she never expected to see a van painted in all sorts of bright colours, and covered in eclectic decorations, including a stuffed moose attached to its roof.
After 14 years of repairing and selling bicycles out of the garage of her home, a Guelph, Ont. woman’s efforts have ended – for now, at least.
Epcor says it has removed more than 20,000 goldfish from an Edmonton stormwater pond.
Witches and warlocks have been flocking to New Brunswick waterways this month, as a new Halloween tradition ripples across the province.
Across the choppy sea from Victoria Monday, the end of a turbulent U.S. election campaign was mere hours away and many British Columbians were watching intently to see who becomes the next president.
Stanley Park will welcome the return of its annual Bright Nights festive event, complete with its illuminated train ride, for another year.
A frustrated Taylor Swift fan is speaking out after being pushed from a short-term rental she booked for the upcoming Vancouver leg of the superstar’s Eras Tour.
Peel police have ordered a large crowd gathered for a demonstration outside a Hindu temple in Brampton to disperse after officers observed weapons.
A man was shot while trying to help his neighbours during a home invasion in Nobleton Monday evening, York Regional Police say.
Former Toronto school board trustee Rachel Chernos Lin has won the byelection in Toronto’s Ward 15, according to the city’s unofficial results.
One person was killed in a crash east of the Calgary airport on Monday.
Calgary police are looking for help to locate a 29-year-old man who's been missing since September 2023.
Calgary police are making changes downtown.
Another rally is planned for Tuesday as residents push back on a city proposal to build a tentlike structure to house asylum seekers.
A Kingston, Ont. mother who was accused of negligence and abandonment in the death of one of her children earlier this year is now facing a murder charge.
The City of Ottawa has announced the 18 people who will serve on the volunteer nightlife council, which will meet several times per year with nightlife commissioner Mathieu Grondin to discuss the city's nightlife economy.
A child around 10-years-old was severely injured after being struck by a truck in Montreal's Plateau-Mont-Royal borough.
Montreal police are looking for a 14-year-old girl who's been missing for two weeks.
With just one day before the U.S election, American expatriates living in Canada are mobilizing to get the vote out.
Oil and gas producers in Canada will be required to cut greenhouse gas emissions by about one-third over the next eight years under new regulations being published today by Environment Minister Steven Guilbeault.
Two people living in King Edward Park are sharing what they saw when a suspicious fire destroyed a building under construction over the weekend.
The City of St. Albert unveiled two new seats in its river valley Monday that will give people a place to rest and get information on support for people suffering domestic violence.
A research team has confirmed a pair of tornadoes touched down in central New Brunswick last week.
A measles outbreak declared in New Brunswick’s Zone 3 last week, which includes Fredericton and the upper Saint John River Valley, has more than doubled since last week.
The RCMP says it is investigating the sudden deaths of two people in Cole Harbour, N.S.
It’s the last call at the Cambridge Hotel. The 86-year-old hotel on Pembina Highway is set to close its doors Tuesday.
There are 20 transitional beds at St. Boniface Street Links for patients who either go to the hospital homeless, or lose their homes while in hospital.
Murray Sinclair, who was born when Indigenous people did not yet have the right to vote, grew up to become one of the most decorated and influential people to work in Indigenous justice and advocacy.
Jury selection is underway in the trial of Ruben Manz, a Regina-based chiropractor who is facing multiple counts of sexual assault.
Two former employees affiliated with the Saskatchewan Health Authority (SHA) and the province's Health Quality Council (HQC) were terminated after allegedly being paid by a separate employer at the same time.
Here's a look at the large pool of candidates for Regina's Ward 4.
Erick Buhr has been found guilty of second-degree murder in the death of his grandmother, Viola Erb.
The Hanover Police Service said they received a report in the early morning hours of Oct. 30 of an injured 4-month-old baby who was treated at the emergency department of the Hanover and District Hospital.
A winner has been chosen as a massive fundraiser for the Kitchener Waterloo and Stratford Perth Humane Society comes to a close.
New details of a 2023 fatal stabbing — where the victim walked into Boston Pizza to get help — emerged at Saskatoon Provincial Court, during a sentencing hearing on Monday.
Residents of an apartment in downtown Saskatoon were left without water this weekend.
Saskatoon Transit wants riders to know about a fraudulent social media account selling fake fare passes.
One person has been arrested and provincial police in the Temiskaming area of northern Ontario are asking the public to stay away from two separate areas as the investigation continues.
Greater Sudbury police say a man was killed and his female passenger injured when they were ejected from a vehicle in Chelmsford while he was doing donuts in an open field Sunday afternoon.
The mayors of Ontario's largest cities are asking the province to consider using the notwithstanding clause in the constitution to ensure measures to combat homelessness are implemented in a timely and effective way.
In handing down the sentences for two London parents, Justice Thomas Heeney told the court, "The facts of this case were the most egregious that I have encountered during my 26 years on the bench."
An innovative program launched by the Middlesex London Paramedic Service (MLPS) aims to cut down on the response time for patients requiring advanced emergency care.
Longtime broadcaster Dan Smoke has died. His wife Mary Lou confirmed the news on social media.
A mother who was struck by a pickup truck while crossing the street in south Barrie last week is lucky to be alive and thankful to those who came to her aid.
Police are investigating a collision in Springwater Township that claimed the life of one individual and sent three other people, including a young teen, to the hospital over the weekend.
Bailey Durocher's parents want to see change after the conditional sentence handed to the driver responsible for his death as their son's memory is honoured.
They City of Windsor is taking legal action against the federal government.
Windsor-Essex health care partners are working together in anticipation of increased hospital volumes heading into the winter.
The Greater Essex County District School Board (GECDSB) is asking trustees to vote on a multi-year financial recovery plan to help make up a $6.3-million deficit.
A frustrated Taylor Swift fan is speaking out after being pushed from a short-term rental she booked for the upcoming Vancouver leg of the superstar’s Eras Tour.
A British Columbia senior who drove his pickup truck into a march for Indigenous residential school survivors will avoid jail time after he was sentenced Monday to nine months of house arrest.
More than 230,000 households and businesses in British Columbia were without electricity Monday during the peak of a storm during which heavy rains and strong winds downed power lines.
Police in Kamloops, B.C., are reminding parents and guardians to check their children's Halloween candy after receiving a report of a mother finding a razor blade in one of her daughter's treats.
More than two years after Alannah Brown and Douglas Barker were found dead north of Penticton, police are asking for help identifying a vehicle they believe was associated with the crime.
Dave Lindsey began growing giant pumpkins to bring a bit of magic to his grandkids' Halloween.
The calendar may have just flipped to November, but Christmas is already on many people's minds.
Crowsnest Pass Mayor Blair Painter said a vote later this month is looking to hear from residents to determine if they want to see the coal industry come back to the region.
The Hurricanes weathered an early storm Saturday but eventually fell, losing 5-4 to the Rebels in a game played in Red Deer.
The mayors of Ontario's largest cities are asking the province to consider using the notwithstanding clause in the constitution to ensure measures to combat homelessness are implemented in a timely and effective way.
A young person in Sault Ste. Marie has been charged with two offences that took place in the same area Oct. 30.
A 25-year-old from Otterville, Ont., has been charged with mischief-related offences following incidents that began early Sunday morning at a tavern in Thessalon.
School staff are being struck more often, students are fighting more frequently, and police are increasingly being called to school grounds, according to data compiled and released this week by the Newfoundland and Labrador Teachers' Association.
Newfoundland and Labrador's auditor general has issued a warning about the province's financial position as the government announced it would finish the 2024-25 fiscal year with a higher-than-expected deficit.
Police in Newfoundland and Labrador have charged an off-duty RCMP officer for allegedly driving while impaired, following a crash on Sunday.
The Shopping Trends team is independent of the journalists at CTV News. We may earn a commission when you use our links to shop. Read about us.
