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Thomas StorringDirector – Economics and Statistics
Tel: 902-424-2410Email:

May 31, 2023

Canada’s Real Gross Domestic Product (GDP) increased 3.1% (all figures seasonally adjusted at annual rates) in the first quarter of 2023, following a 0.1% decline in Q4 2022. Compared to pre-pandemic Q4 2019, the Canadian economy was 3.7% larger in Q1 2023.

Statistics Canada notes that growth in household consumption and international trade was moderated by slower business investment in inventories accumulation as well as declines in business investment in machinery and equipment and residential structures. Final domestic demand increased 2.6% in Q1 2023.

Household consumption growth increased 5.7% in Q1. Increase in durable goods, driven by motor vehicles, spending accounted for much of the increase. Growth in services picked up in Q1 2023,l ed by food and beverage services and travel.

Residential investment contracted for the fourth consecutive quarter, falling at a seasonally adjusted annualized rate of 14.6% as new construction, renovation activities, and ownership transfer costs all declined amid rising interest rates and slowing mortgage borrowing. Government investment increased by 13.8%.

Business investment for machinery and equipment declined on lower medium and heavy trucks, buses and other motor vehicles, and aircraft and other transportation equipment. The declines were partially offset by increase in investment in engineering structures by oil and gas industry and intellectual property products.


Imports edged up by a seasonally adjusted annualized rate of 0.9% in Q1 because of gains in energy products, pharmaceutical and medicinal products, and travel service expenses.

Exports grew by 10.1% on rising passenger cars and light trucks, metals, wheat, and other crop products.

Inventory accumulation slowed to $12.6 billion in Q1, following a record high level in additions to inventory in the second and third quarter of 2022. Statistics Canada reported that the declines occured in farm inventories and motor vehicles.


The terms-of-trade (ratio of price of exports to price of imports) decreased in Q1 driven by the decline in prices of exported goods. 

The overall GDP deflator (reflects overall price of domestically produced goods and services) was up 0.9% on annualized basis.

Nominal GDP increased at a seasonally adjusted annualized rate of 4.2% in Q1, following the 3.0% decline in Q4 2022. 

Employee compensation (measured in current prices, not real volumes) was up by a seasonally adjusted annualized rate of 7.2% in Q1. This was the largest quarterly growth in compensation of employees since Q2 2022.Statistics Canada noted that the largest increases in compensation were in professional and personal services, manufacturing, and construction.  

Lower revenues for energy companies decelerated net operating surplus of corporations, though it remained elevated. Net mixed income continued to increase in Q1.

With higher growth in nominal household consumption expenditures, the household savings rate slowed to 2.9% of disposable income in Q1.


Source: Statistics Canada. Gross domestic product, income and expenditure, second quarter 2020Table 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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