Canada’s economy shrank -0.4% qoq in Q2, as exports and business investment fell sharply. The downturn was led by a steep -7.5% drop qoq in exports, with machinery, travel services, and particularly autos hit hard by U.S.-imposed tariffs. Passenger car and light truck exports plunged -24.7% qoq.
Meanwhile, imports fell -1.3% in the quarter, reflecting Ottawa’s counter-tariff measures against the U.S. That helped cushion the trade balance slightly, though it also underscored the disruption in cross-border commerce.
Monthly GDP data painted an equally weak picture, with output slipping -0.1% mom in June versus expectations for modest growth of 0.1% mom.
