GDP in Canada

Overview

Gross domestic product (GDP) measures the economic performance of a country over a given period, typically a year or a quarter. For this reason, it is the most significant economic indicator to assess a country’s economy (see our GDP page for more information on this indicator).

Canada’s GDP figures (Canadian economic accounts) are calculated by Statistics Canada based on the Canadian System of Macroeconomic Accounts (CSMA). At Statistics Canada’s website, data from 1981 onward are available.

Canadian GDP Growth Performance

From 1999 to 2008, Canada posted strong economic growth and GDP expanded 2.9% annually on average. Due to its close economic ties to the United States, in the crisis-year 2009 Canada’s economy contracted 2.7% over the previous year. Canada did manage to recover quickly from the impact of the crisis, however, thanks to sound pre-crisis fiscal policy, a solid financial system, a relatively robust external sector and the economic strength of its resource-rich western provinces. Since 2010, growth has picked up again and between 2010 and 2013 Canada’s economy expanded 1.4% per year on average.

Structure of Canadian Gross Domestic Product

Domestic demand represents the lion’s share of Canada’s GDP, with private and government consumption together accounting for broadly three-fourths of total GDP. Fixed investment is another main component of GDP. From 1980 to 2003, it represented broadly 19% of GDP on average, and during recent years the share of total GDP improved slightly to reach broadly 24% in 2013. From 1981 to 2007, positive net exports of between 2% and 9% made modest positive contributions to Canada’s economic growth. However, in recent years the country tallied negative net exports of around 2% of GDP as imports growth have outpaced exports growth since 2010.

Canada’s economy is dominated by the services industry, which accounts for approximately 70% of total economic activity and is led by real estate services, public administration, health care and social assistance as well as finance and insurance. Canada also has a relevant manufacturing sector that accounts for approximately 11% of GDP and is led by the fabrication of transport equipment and food production. Unlike most developed countries, the primary sector remains important for Canada’s economy; the oil and logging industries are the two most important. Oil products constitute Canada’s biggest single export commodity.

When are Canadian GDP Data Released?

Statistics Canada releases GDP data on an annual, quarterly and monthly basis. Annual, quarterly and monthly data are consistently linked. The annual GDP data are published together with the GDP reading for the fourth quarter. Both quarterly and monthly prints are released by Statistics Canada within 60 days of the reference period. For instance, the reading for the fourth quarter and the corresponding full year are published by late February or early March. Statistics Canada’s website provides a detailed release calendar that shows the next release dates for both quarterly and monthly GDP.

How are Canadian GDP Figures Computed?

Statistics Canada applies the income and expenditure approach to calculate annual and quarterly GDP data. For calculating annual and monthly GDP data, it uses the production approach. The income and expenditure approach measure aggregate economic activity in two different ways. While the income approach takes into account all incomes arising from production and thus represents the sum of all factor incomes that are generated by productive activity, the expenditure approach considers all expenditures on production or, in other words, the sum of all sales to final users. Due to the different estimation procedures, the two approaches can lead to different GDP estimates, causing a statistical discrepancy. Statistics Canada treats these discrepancies to obtain a consistent global GDP figure. The production approach, which is used to estimate monthly and annual GDP data, determines the value added of the final output in the economy less the intermediate inputs used up in the production process. This value is further adjusted by adding taxes and subtracting subsidies on products.

How Accurate are Canadian GDP Numbers?

Statistics Canada publishes a first estimate of GDP data two months after the respective reference period in order to provide timely and up-to-date information. This first release is generally subject to a subsequent revision process that allows integration of the most recent information on new surveys, taxation data, public accounts, consensuses, updates to benchmark data, etc. Quarterly GDP data are generally revised during the first quarter of the year, covering data up to three years back. Monthly data are generally revised up to a year and a half back. Unless historical revisions are undertaken, which usually are done once per decade, data are usually not revised again. 2012 was the last time Statistics Canada released a historical revision of GDP data dating up to 30 years prior in order to take into account new international standards. According to Statistics Canada, the monthly GDP data are generally less reliable than the annual GDP data as less information is available to estimate them.

Why are Canadian GDP Data Important?

GDP growth is commonly considered as the most vital indicator to assess a country’s economic performance. Economic growth, which is calculated as the rate of change of the real GDP, is the best measure to assess an economy’s development. Above all, it is useful for short-term analysis. In addition to the headline GDP growth figure, the GDP report contains important information that provides an exhaustive view on the state of the Canadian economy. Canada is the eleventh largest economy in the world and forms part of the G7, therefore Canadian GDP growth data have a remarkable impact in the global market and are closely watched.

Where Can I Get Forecasts for Canada’s GDP?

Many sources provide forecasts for Canadian GDP growth. The government, banks, consultancies and think tanks closely watch the Canadian economy and keep their projections for Canadian GDP growth up-to-date. FocusEconomics gathers more than 20 different forecasts on Canadian GDP and provides an average (Consensus Forecast) from the economists surveyed. This collection gives you a comprehensive overview on Canada’s future GDP growth rates as well as the minimum and maximum projections for Canadian GDP growth.

Forecasts for Canada’s GDP growth are contained in the monthly FocusEconomics Consensus Forecast for Canada and the monthly Major Economies (G7 and BRIC) report. All reports are available both on an ad-hoc basis and via an annual subscription (including optional Excel support). Download a free sample or purchase the report directly via our Online Store. The report is available immediately after purchase.