The sector hit hardest by U.S. tariff threats just gave Canada its best growth print in years.
Real GDP rose 0.2% in February. The country is on track for about 1.7% annual growth in the first quarter. The data came from Statistics Canada on April 30.
That's a sharp bounce after a soft end to 2025. It also lands while the Bank of Canada is weighing its next rate move.
Factories Led The Gain
Goods-making firms grew 0.4% in February.
Factories did most of the heavy lifting. The factory sector rose 1.8% in the month. That was the biggest monthly gain in factories since January 2023.
The bounce was wide.
Machinery makers added 8.7%. Transport gear rose 5.5%. Cars and parts climbed 9.8%.
Inside that car number, the gain was even sharper. Vehicle assembly itself jumped 20.4%. Parts rose 4.2%.
Several Ontario car plants drove the rebound. They had been shut for retooling in January. They ramped back up in February.
That came as U.S. car output rose at the same time, which lifted exports of cars and parts.
This matters because factories have been the most exposed sector to U.S. tariff stress. The sector had been sliding for months. February flipped that.
What Else Moved The Print
Wholesale trade rose 0.9% as auto supply bottlenecks eased. The gain almost fully offset January's drop.
Car parts wholesalers were up 6.1%. Food and drink wholesalers were up 2.7%. Drug wholesalers were up too.
Wholesale trade tracks goods on the move. So a strong wholesale month often points to a strong factory month, which is exactly what landed.
Truck transport rose 2.3%. That was its biggest gain since March 2021. It tracked the same auto rebound.
Rail freight added 1.6%, helped by higher potash and canola loads.
Oil and gas output added 0.4%. Oil sands work slipped 1.7% on plant maintenance in Alberta. Crude pumped in Saskatchewan and Newfoundland made up the gap.
Two things weighed on the print.
The public sector fell 0.3%. Schools and city offices both shrank.
Arts and sports fell 2.5%. The NHL paused for two weeks for the Milano-Cortina 2026 Winter Olympics. Spectator sports activity dropped with it.
What To Watch
Statistics Canada flagged a flat read for March in its early estimate.
Wholesale and transport gains were canceled out by drops in retail and mining. The full Q1 print lands May 29.
The data suggest the economy expanded 0.4% in Q1. That works out to about 1.7% on an annual basis.
The Bank of Canada has been cautious. Tariff stress has clouded the outlook. A clean rebound print could give the bank room to hold rates steady at its next meeting.
A weaker print could push the bank back toward cuts.
Investors are also watching the auto sector closely. Ontario plants are tied to U.S. demand. If U.S. car output slows, the rebound fades fast.
If 1.7% holds, it's a clean bounce number for the Bank of Canada to chew on. A weak handoff into Q2 would change that story fast.
