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March 01, 2022CANADIAN ECONOMIC ACCOUNTS Q4 & ANNUAL 2021 
Canada’s Real Gross Domestic Product (GDP) increased 6.7% (all figures seasonally adjusted at annual rates) in the final quarter of 2021. This followed a gain of 5.5% in Q3, a decline of 3.6% in Q2, and a gain of 4.8% in Q1 2021. Real GDP was 3.3% higher than for the same quarter of 2020. Compared to pre-pandemic Q4 2019, the Canadian economy was 0.1% higher in Q4 2021.
Statistics Canada notes that the pick-up in GDP in the final quarter was driven by business investment in engineering structures (+3.5%) and home ownership transfer costs (+14.3%). As restrictions were further phased out, household consumption increased with higher spending on semi-durable goods and services. Growth in international trade for both exports (+3.2%) and imports (+3.4%) was primarily driven by motor vehicles and parts, and in travel services.
Following a strong growth in Q3, household spending increased 1.0% in the fourth quarter driven by services consumption (+2.4%). Goods consumption declined 0.7% with lower spending on semi-durable and non-durable goods offsetting the gain in durable goods.
Residential structures increased 10.2% following a 31.0% decline in the previous quarter. Business investment in machinery and equipment increased 4.7% in Q4. Investment in non-residential structures increased 11.0% while investment in intellectual property products decline 3.9%.
Export volumes increased 13.4% with higher shipments of goods (+10.3%) and services (+29.8%). Imports were up 14.4% with a 13.0% gain in goods imports and a 21.0% gain in services imports.
Following a decline in the third quarter, inventories increased to $9.9 billion in Q4 2021.
The terms-of-trade (ratio of price of exports to price of imports) increased 1.0% driven by higher in exported crude oil and crude bitumen prices. The overall GDP deflator was up 6.5% on annualized basis.
Nominal GDP increased 13.7% in Q4. Annualized compensation of employees rose 7.8%.
Household disposable income declined 5.1% in the fourth quarter, posting the second quarterly decline. This was mainly due to lower government transfers to households. Following five consecutive quarters of double-digit savings rates, household savings rates dropped to single-digits over the last two quarters (9.0% in Q3 and 6.4% in Q4 2021).
ANNUAL – 2021
Real GDP in Canada increased 4.6% in 2021, following a 5.2% pandemic-induced decline in 2020. Higher household spending on food and beverage services and clothing supported by the re-opening of the economy as well as increased residential construction provided the largest contributions to the GDP growth in 2021.
Household consumption increased 5.2% following a decline of 6.2% in 2020.
Business capital investment increased 7.8% in 2021. Residential structures increased 15.4%. Machinery and equipment investment was up 7.1% while intellectual property products increased 0.7%.
Export volume increased 1.4% as higher exports of goods (+1.9%) offset the decline in services exports (-0.4%) in 2021. Import volumes increased 7.4% with both higher imports of goods and services.
Compensation of employees increased 9.1% in 2021.
Source: Statistics Canada. Gross domestic product, income and expenditure, second quarter 2020, 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 36-10-0111-01 Current and capital accounts - National, Canada, quarterly
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