Gross domestic product, income and expenditure, first quarter 2025
Released: 2025-05-30
Real gross domestic product (GDP) increased 0.5% in the first quarter, the same pace as in the fourth quarter of 2024. Exports of goods drove the growth in the first quarter of 2025, followed by accumulations of business non-farm inventories. Higher imports and weak residential structure resale activity tempered overall growth in the first quarter.
On a per capita basis, real GDP was up 0.4% in the first quarter, after increasing 0.1% in the previous quarter. In the first quarter, final domestic demand, which represents total final consumption expenditures and investment in fixed capital, did not increase for the first time since the end of 2023.
Chart 1
Real gross domestic product and final domestic demand
Chart 2
Contributions to percentage change in real gross domestic product, first quarter of 2025
Exports and imports rise coinciding with US tariff threats
Total exports rose 1.6% in the first quarter of 2025 after increasing 1.7% in the fourth quarter of 2024. In the context of looming tariffs from the United States, exports of passenger vehicles (+16.7%) and industrial machinery, equipment and parts (+12.0%) drove the overall increase in exports in the first quarter of 2025. Meanwhile, there were lower exports of crude oil and crude bitumen (-2.5%) and refined petroleum energy products (-11.1%).
Imports increased 1.1% in the first quarter, following a 0.6% rise in the previous quarter. Higher imports of industrial machinery equipment and parts (+7.4%) and passenger vehicles (+8.3%) led the overall increase. The threat of tariffs can be expected to influence trading patterns and incite importers to increase shipments prior to these tariffs being implemented to avoid additional costs. At the same time, travel imports fell 7.0% in the first quarter, as fewer Canadians travelled to the United States.
Chart 3
Volumes of exports and imports
Business non-farm inventories accumulate in the first quarter after withdrawals in the previous quarter
Business non-farm inventories accumulated in the first quarter, after recording withdrawals in the fourth quarter of 2024. Durable goods in the wholesale trade sector led the inventory accumulation in the first quarter of 2025. The retail trade sector posted a small accumulation in inventory in the quarter, following withdrawals in the previous quarter. Industries in the manufacturing sector posted a slight withdrawal in the first quarter, albeit at a slower pace than in the previous quarter.
Chart 4
Change in total and per capita real household final consumption expenditures
Household spending
Growth in household spending slowed to 0.3% in the first quarter, after rising 1.2% in the fourth quarter of 2024. Growth in spending in the first quarter of 2025 was driven by rental fees for housing and financial services. These increases were almost offset by lower spending on passenger vehicles.
On a per capita basis, household final consumption expenditures increased 0.1% in the first quarter, following 0.8% growth in the fourth quarter of 2024.
Chart 5
Housing investment
Residential construction down due to decline in ownership transfer costs
Residential investment decreased 2.8% in the first quarter. This was driven by an 18.6% decline in ownership transfer costs, which represents resale market activity. This was the largest decline in ownership transfer costs since the first quarter of 2022 (-34.8%), when housing resales were curbed by a string of interest rate increases. Despite a decline in resale activity, new construction rose 1.7% in the first quarter of 2025, led by increased work-put-in place for apartments, primarily in Ontario. Renovations (+0.5%) also edged up in the first quarter.
Business investment in non-residential structures is down, while spending on machinery and equipment is up
Business investment in non-residential structures declined 1.6% in the first quarter, led by a drop in engineering structures (-2.7%), which coincided with a decline in investments in the oil and gas sector. In contrast, business investment in non-residential buildings increased 1.1% in the first quarter, led by industrial structures, such as factories and plants.
Spending by businesses on intellectual property products decreased 0.4% in the first quarter, mainly due to reduced activity in research and development and lower spending on custom and own-account software.
Business investment in machinery and equipment increased by 5.3% in the first quarter. This was a strong quarter, as every machinery and equipment grouping increased. Aircraft and other transportation, equipment and parts contributed the most to this rise, given higher imports of these items in the first quarter.
Focus on Canada and the United States
In 2021, 50.9% of investment in machinery and equipment in Canada were dependent on imports from the United States. This share represents both direct (43.5%) and indirect (7.4%) imports. Direct imports include purchases of final products, like trucks or tractors from the United States. Indirect imports are purchases of goods that are subsequently used in Canadian production, such as buying steel from the United States to be manufactured into aircraft in Canada.
Chart 6 shows the shares of direct and indirect US imports for expenditures on machinery and equipment in Canada, as of 2021. The data are based on special tabulations from the 2021 Supply and Use Tables and Trade in value added tables.
For more data and insights on areas touched by the socio-economic relationship between Canada and the United States, see the Focus on Canada and the United States webpage.
Chart 6
United States import shares of investment in machinery and equipment, 2021
Gross domestic product deflator
The GDP deflator was up 0.6% in the first quarter, led by higher prices for energy product exports and household final consumption expenditures. Import prices rose more than export prices; therefore, the terms of trade fell 0.6%.
Chart 7
Gross domestic product price indexes, selected components
Wages grow at fastest pace in western provinces
Compensation of employees rose 0.8% in the first quarter, after increasing at a similar pace in the fourth quarter of 2024. Growth in the first quarter of 2025 was driven by higher wages in health care and social services (+3.2%) and construction (+2.3%). There were retroactive payments in the health and social services sector in Quebec. Meanwhile, declines in the retail trade, wholesale trade and manufacturing sectors dampened overall wage growth.
Compensation of employees rose in all provinces and territories in the first quarter, except in the Northwest Territories including Nunavut (-3.4%). Wages grew at the fastest pace in Saskatchewan (+1.4%), Alberta (+1.2%) and British Columbia (+1.0%).
Map 1
Compensation of employees, quarter-to-quarter % change, seasonally adjusted data
Household saving slows on weak income gains
The household saving rate slowed to 5.7% in the first quarter, the lowest rate since the first quarter of 2024, as the gain in disposable income (+0.8%) was lower than that of nominal household consumption expenditure (+1.0%). Income gains in the first quarter of 2025 were derived mainly from wages. Meanwhile, net investment income declined.
Investment income received declined 1.7% in the first quarter, fuelled by declines in interest received on deposits, securities and other assets (-3.9%) and foreign investment income (-4.5%). Despite weaker equity markets at the end of the first quarter, dividends received from Canadian sources were up 2.9%.
Household property income payments, comprised of mortgage and non-mortgage interest expenses, declined 1.8% in the first quarter, along with reductions in the Bank of Canada's policy interest rate. Interest paid on consumer credit products, such as personal loans and lines of credit, accounted for three-quarters of the decline in overall property income payments.
Corporate incomes moderate in first quarter
Gross operating surplus of corporations increased 1.4% in the first quarter, after rising 3.7% in the previous quarter. The increase in the first quarter was led by higher incomes in the oil and gas extraction, petroleum manufacturing and motor vehicle manufacturing sectors. Higher income among financial corporations also contributed to the quarterly increase, led by the banking industry. A lower surplus in many non-financial service industries tempered the overall growth in corporate incomes.
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Sustainable development goals
On January 1, 2016, the world officially began implementing the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the following 15 years. The plan is based on 17 specific sustainable development goals.
Data on gross domestic product, income and expenditure are an example of how Statistics Canada supports the reporting on global sustainable development goals. This release will be used to measure the following goals:
Note to readers
Gross domestic product (GDP) data for the first quarter of 2025 have been released along with updated data for the four quarters of 2024. Updates to data from the first to fourth quarters of 2024 were due to the incorporation of updated source data.
Estimates of the housing stock in units (table 36-10-0688-01) have been updated from the second quarter of 2016 to the fourth quarter of 2023. These updates reflect the improved estimation methodology for housing stock in units for all quarters of 2024, which was implemented in November 2024 with the GDP by income and expenditure release. To align with the revision policy of GDP by income and expenditure, the updated housing stock in units estimates for periods prior to 2024 will be incorporated into the calculation of GDP at a later date.
Accounting for tariffs in gross domestic product by income and expenditure accounts
Customs import duties are included in taxes less subsidies on products within the calculation of GDP by income. The estimated value of these duties is derived from Government Finance Statistics data reported to Statistics Canada by the Canada Border Services Agency through the Federal Government's Central Financial Management and Reporting System. The value is presented on a net basis (i.e., import duties paid less any repayments made to importers as part of existing relief programs or remission orders). As new data are received, the estimated value of import duties will be updated accordingly.
As tariffs are paid by importers, prices for final consumption and capital investment expenditures may increase. These price changes will be reflected in the nominal estimates of GDP by expenditure, while the volume estimates would remove the impact of any price changes.
Net estimates of import duties can be found under "Federal general government" within table 36-10-0477-01.
General
Percentage changes for expenditure-based statistics (such as household spending, investment and exports) are calculated from volume measures that are adjusted for price variations. Percentage changes for income-based statistics (such as compensation of employees and operating surplus) are calculated from nominal values; that is, they are not adjusted for price variations. Unless otherwise stated, growth rates represent the percentage change in the series from one quarter to the next; for instance, from the fourth quarter of 2024 to the first quarter of 2025.
For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Revisions to Canada's gross domestic product
To satisfy the opposing goals for both timeliness and accuracy, Statistics Canada regularly updates (revises) its estimates of Canada's GDP. Further details are outlined in the article, "Revisions to Canada's GDP."
Real-time tables
Real-time tables 36-10-0430-01 and 36-10-0431-01 will be updated on June 9, 2025.
Next release
Data on GDP by income and expenditure for the second quarter of 2025 will be released on August 29.
Products
The data visualization product "Gross domestic product by income and expenditure: Interactive tool," which is part of the Statistics Canada – Data Visualization Products series (71-607-X), is now available.
The document "Revisions to Canada's GDP," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is available.
The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structure.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
Contact information
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