OTTAWA: Statistics Canada is set to release crucial economic data on Friday, including key Gross Domestic Product (GDP) reports for September 2025 and the third quarter (Q3). This report is considered pivotal in determining whether Canada will slide back into an economic recession.
While the Bank of Canada and some of the country’s leading financial institutions are forecasting a modest GDP growth rate of 0.5 per cent for the period, some economists remain skeptical. Currently, the Bank of Canada defines a recession as two consecutive quarters of negative economic growth based on GDP. If the third quarter’s growth is not negative, Canada will, for the time being, technically escape the grasp of a recession.
The nation reported a -1.6 per cent GDP drop in the second quarter (August 2025), following a 2.0 per cent growth rate in the immediately preceding quarter. Economists attribute the decline in exports, a significant component of the GDP, to disruptions in international trade. The last time Canada experienced two consecutive quarters of negative growth was during the COVID-19 pandemic in 2020.
Financial experts like Don Drummond suggest that tariffs imposed by U.S. President Donald Trump have severely impacted Canadian exports, which account for about one-quarter of the nation’s GDP. Furthermore, the high costs associated with renewing mortgages at elevated interest rates are squeezing household spending.
Another complicating factor is the temporary unavailability of international trade data concerning U.S. exports to Canada, stemming from a recent U.S. government shutdown. Economists warn that this missing data could lead to significant revisions in the final GDP figures in the future. Persistent U.S. tariffs continue to pose a threat to Canada’s core export sectors.
