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February 27, 2026CANADIAN ECONOMIC ACCOUNTS, Q4 AND ANNUAL 2025 
Canada’s Real Gross Domestic Product (GDP) contracted at a seasonally adjusted annualized rate of 0.6% (all figures seasonally adjusted at annual rates) in the fourth quarter of 2025, following a 2.4% growth in Q3 2025.
The decline was primarily driven by withdrawals of business inventories following inventory accumulations in Q3. This decline was partially offset by growth in exports, household consumption, and government capital investment.
Household consumption growth rose at a seasonally adjusted annualized rate of 1.7% in Q4 2025. Higher spending on rent and financial services was partially offset by lower expenditure on new passenger vehicles and alcoholic beverages. Government consumption expenditures grew by 3.1%.
Residential investment decreased by 4.4% in Q4 2025, driven by declines in ownership transfer costs, resale market activity, and renovations as well as new construction.
Non-residential investment grew by 2.0% in Q4 on higher investment in machinery and equipment and intellectual property products. Government investment was up 20.4% in Q4 2025, driven by an increase in government investment in weapons systems.
Exports increased 6.1% in Q4, following a gain of 3.8% in the previous quarter. Export growth was due to higher exports of unwrought gold, unwrought aluminum, and aluminum alloys. Imports rose by 1.0% in Q4, as higher imports of computers, clothing and footwear, and metal ores were partially offset by decline in imports of pharmaceutical and medicinal products.
Investment in inventories declined to -$10.1 billion in Q4 2025. Declines in business inventory accumulation were notable in manufacturing and wholesale trade.
Nominal GDP grew at a seasonally adjusted annualized rate of 2.3% in Q4 2025, following a 6.2% growth in Q3 2025.
The overall GDP deflator (reflects overall price of domestically produced goods and services) grew 2.8% from the previous quarter.
Employee compensation (measured in current prices, not real volumes) was up by a seasonally adjusted annualized rate of 2.1% in Q4. Wages growth in federal government/ public administration, finance/real estate/company management, and professional/personal services were partially offset by declines in education and construction wages.
Including mixed income from unincorporated businesses, property income (such as interest and dividends from financial assets), current transfers (such as CPP and EI) with employee compensation, Canada's overall household income grew at a seasonally adjusted annualized rate of 2.5% in Q4 2025.
The household savings rate decreased 0.8 percentage points to 4.4% of disposable income in Q4 as nominal household consumption growth outpaced disposable income.
Net operating surplus for corporations grew at a 7.6% seasonally adjusted annualized rate, as mining and primary metal industries output increased income for non-financial corporations. Net mixed income of unincorporated businesses was up 6.7% in Q4.
Annual
For 2025 as a whole, Canada's real GDP grew by 1.7% - the slowet pace since the decline in 2020.
Canada's real household consumption expenditures increased by 2.3% in 2025, a slight rise from 2023 and 2024.
Canada's real residential construction investment was up 1.0% overall in 2025, the first increase since 2021.
Real non-residential investments (structures, machinery, equipment) declined by 0.3% in Canada in 2025.
Canadian real government spending grew by 2.4% in 2025, decelerating from its pace in 2024.
Canada's export growth declined by 1.7% in 2025.
Import declined by 0.4% in real terms in 2025.
Canada's nominal GDP increased by 4.3% in 2025, down from the 4.8% pace set in 2024.
Canada's broad GDP price deflator increased by 2.5% in 2025, down from 2.8% in 2024.
Employee compensation growth slowed to 3.9% in 2025, the smallest increase since 2016 (except 2020).
Combining slower employee compensation growth with net mixed income, property income receipts and current transfer income, Canada's overall household income increased by 4.0% in 2025, down from 7.7% in 2024.
The net operating surplus of corporations grew by 5.7% in 2025, following a decline in previous two years.
Canada's net mixed income of unincorporated businesses decelerated in 2025, rising by 8.7%.
Source: Statistics Canada. Table 36-10-0103-01 Gross domestic product, income-based, quarterly (x 1,000,000), Table 36-10-0104-01 Gross domestic product, expenditure-based, Canada, quarterly (x 1,000,000), Table 36-10-0112-01 Current and capital accounts - Households, Canada, quarterly; Table: 36-10-0106-01 Gross domestic product price indexes, quarterly
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