(Ottawa) Retail sales in Canada in November remained stable compared to October, but a preliminary estimate from Statistics Canada suggests a recovery in December, the month in which the temporary GST holiday came into effect.
Posted at 12:20 p.m.
The agency said Thursday that retail sales totaled $67.6 billion in November, relatively unchanged from October. BMO senior economist Shelly Kaushik noted that if Statistics Canada’s preliminary estimate of a 1.6% increase in retail sales in December is confirmed, it would be the largest increase in two years.
On the “disappointing” November results, Mme Kaushik noted that a later Black Friday and a start of the Goods and Services Tax (GST) holiday in mid-December kept consumers on the sidelines in the latter part of the month.
Ottawa announced at the end of November temporary GST relief on certain items ahead of the busy holiday shopping period. The relief began on December 14 and will continue until February 15.
Retail sales declined in seven provinces in November. The largest provincial declines in dollars were observed in Alberta (-1.1%), Prince Edward Island (-1.8%) and New Brunswick (-2.0%). Nova Scotia recorded a decline of 0.4%.
In Quebec, the drop was 0.1%.
In November, the largest increase in retail sales at the provincial level was recorded in Ontario (+0.5%), and the growth was attributable to increased sales at motor vehicle and parts dealers.
“Beyond temporary tax relief, lower interest rates should continue to support spending in 2025, but an uncertain business environment could add significant headwinds,” Ms.me Kaushik.
The retail sales figures come ahead of the Bank of Canada’s next interest rate decision, scheduled for Jan. 29, when it will also release its monetary policy report.
-CIBC senior economist Katherine Judge noted that the two-month shift in spending implies that lower interest rates are helping to boost consumer spending, but there is still a lot of ground to make up.
Further interest rate cuts are clearly needed, with inflation below target and risks from the threat of tariffs on Canadian exports to the United States.
Katherine Judge, CIBC Senior Economist
For November, Statistics Canada said sales at motor vehicle and parts dealers rose 2%, while gas stations and fuel sellers saw an increase of 0.7%.
Sales at food and beverage retailers fell 1.6% for the month, while sales at supermarkets and other grocery stores, excluding convenience stores, fell 1.5%.
General merchandise retailers saw a 1% decline for the month.
Core retail sales, which exclude gas stations and fuel sellers as well as motor vehicle and parts dealers, slipped 1% in November.
In terms of volumes, overall Canadian retail sales fell 0.4% in November.
