Canada’s economy saw growth in the final months of 2024, with GDP increasing by 0.6 per cent in the fourth quarter. This growth was driven by strong household spending, which saw a quarterly increase of 1.4 per cent, the highest since 2022. Canadians were buying new vehicles, spending on rent, telecommunication services, and financial services. The construction sector also saw growth, with residential construction increasing by 3.9 per cent, the largest quarterly increase since 2021.
Despite the positive economic indicators, Canada is facing the threat of tariffs from U.S. President Donald Trump. If these tariffs go into effect, Canada’s export sector is expected to take an immediate hit. However, the sector had a strong performance in the fourth quarter of 2024, with exports of goods and services rising by 1.8 per cent. In 2024, exports increased by 0.6 per cent, led by higher exports of crude oil and bitumen, as well as travel services and pharmaceutical products.
The looming threat of tariffs has economists concerned about the long-term impact on Canada’s economy. Bank of Canada governor Tiff Macklem warned that broad-based tariffs from the U.S. would be devastating for the country. He stated that while Canada was able to bounce back from the pandemic-induced recession, the damage from tariffs could be long-lasting. The potential impact on Canada’s economy is significant, with fears of a prolonged economic downturn if tariffs are imposed.
The GDP estimates released by Statistics Canada come just days before Trump’s tariffs were set to take effect. The uncertainty surrounding the potential impact of tariffs on Canada’s economy has left many businesses and policymakers on edge. If tariffs are enacted, it could disrupt trade patterns and supply chains, leading to job losses and decreased economic growth. The Canadian government is closely monitoring the situation and working to protect the country’s economic interests.
Canada’s economic growth in the final months of 2024 was driven by strong household spending and growth in the construction sector. However, the threat of tariffs from the U.S. looms large over the country’s economy. The potential impact of tariffs on Canada’s export sector could have far-reaching consequences for the country’s overall economic growth and stability. Economists and policymakers are closely monitoring the situation and preparing for any potential fallout from the imposition of tariffs by the U.S.
In conclusion, Canada’s economy showed signs of growth in the fourth quarter of 2024, but the threat of tariffs from the U.S. poses a significant risk to the country’s economic stability. The potential impact of tariffs on Canada’s export sector could lead to job losses and decreased economic growth. The Canadian government is taking steps to protect the country’s economic interests and mitigate the potential impact of tariffs. The coming months will be critical for Canada’s economy as it navigates the challenges posed by external threats such as tariffs from the U.S.
