Canadians will gain a better understanding of the country’s financial health later this week with the scheduled release of economic data from Statistics Canada.
Several key gross domestic product (GDP) reports are expected to be released on Friday, Nov. 28, including figures for September and the third quarter of 2025.
The Bank of Canada and some of the country’s top financial institutions are projecting moderate GDP growth of 0.5 per cent, but some economists believe that forecast is wishful thinking and say figures could be slightly lower.
The central bank currently defines a recession as two consecutive quarters of negative economic growth, measured by GDP.
In August, the country reported a -1.6 per cent GDP decline during the second quarter of 2025, which followed a strong 2 per cent gain in the previous quarter. Economists attribute the decline to international trade disruptions, which have plummeted Canadian exports.
If Canada’s GDP growth is negative for a second quarter in a row, it could indicate that the country is experiencing a recession.
“It’s been a long time since we saw a protracted contraction of the economy, but it has happened before,” economist Armine Yalnizyan told CityNews.
The last time the Canadian economy experienced two consecutive quarters of negative GDP growth was in 2020 during then COVID-19 pandemic which marked a period of business closures and travel restrictions, along with decreases in household spending, investment and international trade.
According to economist Angelo Melino, the central bank’s two-quarter guideline is a general rule of thumb used to qualify a recession, but it always a definitive measurement.
“We rely more on the GDP numbers in Canada than they do in the United States,” he explained. “But it depends on how long that decline lasts and how widespread it is before we can determine if we’re in a recession.”
In addition to teaching economics at the University of Toronto, Melino is also a research fellow at C.D. Howe Institute’s Business Cycle Council.
C.D. Howe Institute is a right-leaning think tank with a stated mission to “raise Canadians’ living standards by fostering economically sound public policies,” according to its website. Meanwhile, its Business Cycle Council proposes the start and end dates of recessions in Canada.
“At C.D. Howe, we look at the average growth rate over two quarters, before we start thinking about whether or not we’re in a recession,” Melino said.
“In 2025, it looks like we had stronger growth in quarter one than we had in quarter two, so the average over the first two quarters of the year is positive,” he explained. “Even if quarter three turns out to be negative, unless it’s a steep decline that drops the average of quarter three and quarter four, we won’t declare that a recession.”
What to expect from Q3?
Canada’s GDP grew by 0.2 per cent in July following three consecutive months of declines. It fell again in August by 0.3 per cent, offsetting gains made the month before. Melino attributes the negative outcome to the Air Canada labour strike which saw more than 10,000 flight attendants walk off the job during the summer.
When Statistics Canada releases GDP data for the month of September later this week, Melino expects to see slightly better figures than the previous month due in part to the end of the strike.
“I think people expect September to be a little bit better because of those 10,000 people going back to work,” he explained. “Think of all those livelihoods and all the people that were affected.”
Canada’s economy has taken a major hit over the last year, mostly as a result of U.S. President Donald Trump’s tariffs on major Canadian exports like autos, steel, aluminum and lumber.
“The bottom line is the economy is basically going sideways,” economist Don Drummond explained. “And it’s going sideways because of the hit to our exports, which are around one quarter of our economy.”
“And that, in turn, is causing investment to be even weaker than it was before,” he added. “If the government actually started to build all the housing starts they claim they’re wanting to build, that could turn things around, but all the governments, federally and provincially, seem to be behind their targets, so I’m not sure if that’s going to do it.”
“I don’t think consumption is going to take off and be strong, either,” Drummond said. “We’ve still got a lot of households that are renewing their mortgages from these super low rates they had in 2020 to 2022, and so far they’re doing that without defaulting on their mortgages, but I’m sure it’s squeezing them on their discretionary spending.”
Drummond previously held senior positions in the federal Department of Finance and was Chief Economist at TD Bank from 2000 to 2010. He is also an adjunct professor at Queen’s University.
“I think we’re in for some rough economic times, whether it’s a traditional recession or it’s a bunch of quarters of very, very weak growth or flat growth,” he added.
While the forthcoming Statistics Canada data is expected to provide some insight into Canada’s economic outlook, it will be missing international trade data which the agency receives from the U.S. Census Bureau for information on Canadian exports to the U.S.
That data has been delayed as a result of the six-week U.S. government shutdown, which economists warn could lead to larger-than-normal revisions of GDP data in the future.
