GDP rose by 0.1 per cent in January on a monthly basis after a 0.2 per cent gain in December, Statistics Canada said, pointing to a fragile start to the year.

An advance estimate, which is usually prone to change, showed the economy might expand by 0.2 per cent in February.

Analysts polled by Reuters had forecast no growth in January.

Canada’s economy has struggled in the wake of tariffs imposed by President Donald Trump on steel, autos, aluminum, lumber, copper and other products. The tariffs have dented Canadian manufacturing output.

CUSMA review looms

While exemptions under a free trade deal between the U.S., Mexico and Canada have protected other sectors, growth has been largely muted, with the Canadian economy contracting in the fourth quarter. An upcoming review of the Canada-U.S.-Mexico Agreement is considered a major uncertainty looming over the economy.

Goods-producing industries, which account for a quarter of GDP, grew by 0.2 per cent in January, matching the gain of the previous month.

Mining, quarrying, construction and oil and gas extraction were the biggest growth drivers, helping to offset a 1.4 per cent drop in manufacturing output in January, StatsCan said.

The construction sector expanded for the third month in a row in January. The drop in manufacturing, the second-biggest contributor to monthly GDP, wiped out all the growth seen in December.

Service industries such as real estate, finance and healthcare are the biggest contributors to the Canadian economy, but growth in this category stalled in January, the statistical agency said.

Activity in the wholesale trade, transportation and real estate sectors shrank in January, offsetting growth in some major economic contributors such as retail, educational services and finance and insurance.

Overall, nine of the 20 industrial sectors recorded growth in January, StatsCan said.

Growth, inflation worries

Economists have said growth could take a bigger hit in the coming months as high crude oil prices resulting from the Iran war curtail consumer spending and push up inflation.

The Bank of Canada also could be forced to raise interest rates.

“The global energy price shock from the U.S.-Iran conflict is unlikely to derail Canada’s economy, but it compounds existing headwinds from U.S. tariffs, trade policy uncertainty and a shrinking population,” Michael Davenport, a senior economist at Oxford Economics, wrote in a note.

“Developments in the Middle East and the outcome of the mid-year USMCA (CUSMA) review remain highly uncertain, but will be pivotal to Canada’s economic prospects this year,” he said.

Money markets expect no change in interest rates at the Bank of Canada’s next meeting in April, but are pricing in one increase of 25 basis points in the second half of the year.

The Canadian dollar was down 0.07 per cent at C$1.3932 to the U.S. dollar, or 71.78 U.S. cents. Yields on two-year Canadian government bonds were down 4.7 basis points at 2.668 per cent.

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The federal government announced up to $94.5 million in funding for the 14 groups over five years through the Sectoral Workforce Solutions Program.

The funds are intended to assist 14 organizations develop informational products and employer toolkits to help workers and businesses adapt to current labour market challenges, a federal news release said.

These tools include forecast reports, dashboards on topics like job vacancies by key occupations, and sector-specific growth opportunities.

These are intended to offer job seekers, workers, employers and training providers a detailed view of the challenges and needs within each sector.

The aim is to ultimately help reduce skills shortages, improve job readiness, and support long-term growth across multiple industries, the federal government said.

Other organizations funded represent the energy, construction, trucking, advanced manufacturing, aerospace, tourism, forestry, mining, information and communications technology, the environment and the bio-economy sectors.

These sectors account for 66.2 per cent of Canada’s gross domestic product and employ about 9.9 million workers, the news release said.

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The newly announced Manitoba Crown-Indigenous Corporation (MCIC) partnership will bolster economic development and expand trade corridor projects, Churchill included, the province said in a press release Dec. 9.

“Churchill has always been a gateway to the world,” Premier Wab Kinew said in the same release. “For generations, people have seen its potential but what was missing was the partnership to bring it to life.”

The new Crown corporation “is how we turn that potential into real progress,” he added.

WHY IT MATTERS: The Port of Churchill Plus project promises to expand the port’s scope and potential as a trade hub, including potential trade route improvements for agricultural goods.

Co-ordination of the Port of Churchill Plus project will fall under the new partnership’s purview.

The project is on the list of “transformative strategies” noted under the federal government’s Major Projects Office of Canada. The strategies, including Port of Churchill Plus, “all meet the criteria of growth, security, diversification of markets and reconciliation,” according to the federal government.

In the case of the Port of Churchill, the strategy includes new road access, rail upgrades, energy corridor and ice-breaking to expand the port’s window of active trade. The federal office also notes the creation of the MCIC as part of the strategy, prioritizing Indigenous ownership.

The office’s website says Port of Churchill plus will “develop the projects needed to turn the Port of Churchill in major four season and dual-use gateway to the region. Expanded export capacity in the North through Hudson Bay would contribute to increased and diversified trade with Europe and other partners.”

The new partnership is real progress on the part of the Province of Manitoba to expand the Port of Churchill as a key piece of trade infrastructure, Keystone Agricultural Producers (KAP) president Jill Verwey believes.

“This new Crown-Indigenous corporation will ensure that Manitoba works in collaboration with Indigenous leadership to advance both economic development and environmental stewardship, while creating new opportunities in the north and across the province,” Verwey said.

Verwey is hopeful that the development of the Port of Churchill will create more opportunities for Manitoba farmers and the province’s economy.

Indigenous partnership

Steps will be taken to ensure that Indigenous leadership is a cornerstone of the project, Kinew said. As well as bolstering co-operation between the province and federal Major Projects Office, the province says the partnership will ensure better consultation with Indigenous communities and “ensure the project reflects environmental stewardship and Indigenous knowledge.”

The province expects to formally establish the corporation next March. It is currently working with Indigenous organizations like the Assembly of Manitoba Chiefs and the Manitoba Métis Federation and other First Nations leadership to that goal, the Dec. 9 release said.

Kinew also announced that the province is providing $250,000 to study the viability of a marine protected area in Hudson Bay.

A town hall is expected to be held in Churchill in February 2026 on the topic of rail line improvements and the port project, the province said.

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“Without a clear shift in approach, Canada risks falling permanently behind in a sector critical to domestic and export growth, food security, and economic resilience,” the groups said in an open letter published Monday.

The Canadian Federation of Agriculture and 29 other groups called attention to Canada’s shrinking share in the global agri-food market and slowing growth in annual productivity.

“While governments in other nations are making bold investments in agri-tech, domestic food processing, production, and export readiness, Canada has been slow to respond, losing opportunities in the process,” they said.

The coalition said Canadian agriculture and agri-food has the potential to drive an additional $100 billion in GDP growth over the next 10 years.

They asked the federal government to:

• Create a focused plan for economic growth in the agricultural sector, including targets for investment in innovation, value-added processing, exports and others
• Reduce regulatory burdens to make Canada more attractive to investors and innovators
• Prioritize infrastructure that supports agriculture, like railways, ports and rural infrastructure
• Modernize risk management tools to support the sector through trade and climate challenges

The Canadian Federation of Agriculture (CFA) held board meetings and a policy summit in Winnipeg on July 15 and 16.

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Imports of goods dropped 1.5 per cent in March, driven by a 2.9 per cent slump in shipments from the United States after Canada imposed retaliatory tariffs on its neighbor following President Donald Trump’s 25 per cent tariff on Canadian steel and aluminum from March 12.

Why it matters: The United States is Canada’s biggest trading partner and Trump’s tariffs have hurt trade, investments and jobs on both sides of the border.

Exports to the United States dropped by 6.6 per cent but were almost compensated by an increase in exports to the rest of the world.

Reuters reported on Tuesday that small and medium companies in Canada are pivoting from the United States and seeking new markets as tariffs or the uncertainty around them is making doing business difficult with the biggest market in the world.

“One exciting story that comes out of the data is clearly there’s an indication of interest in markets outside of the United States,” said Stuart Bergman, chief economist at Export Development Canada.

Analysts polled by Reuters had estimated that the total trade deficit would widen to C$1.56 billion in March, up from a revised C$1.41 billion in February.

Trump’s tariff threats at the end of last year and the beginning of this year pushed Canadian firms to advance supplies south of the border, boosting trade surpluses in December and January. But as tariffs took hold, shipments to the United States have been squeezed.

Canadian Prime Minister Mark Carney will meet with Trump on Tuesday to start talks on a comprehensive trade and security deal, which experts have said could eventually lead to reducing the burden of tariffs on Canada.

The Bank of Canada has said that it would act quickly and decisively if the economy takes a sharp hit, with money markets now estimating almost a 52 per cent chance of a rate cut of 25 basis points in June.

The Canadian dollar was up 0.18 per cent to trade at 1.3801 to the U.S. dollar, or 72.46 U.S. cents. Bond yields for the government’s two-year bonds were down 0.5 basis points to 2.557 per cent.

Canada’s overall exports for March came in at C$69.9 billion, down from C$70.04 billion in February, led by the United States. This was the second month in a row when exports fell.

“Despite the two consecutive monthly declines, export levels remained relatively high in March, posting a 10.2 per cent increase compared with the same month a year earlier,” Statscan said, adding that lower prices primarily led to the drop.

In volume terms, exports were up 1.8 per cent in March, it said.

However, imports fell in both value and volume terms.

They dropped for the first time in five months, with the largest contributors being metal and non-metallic mineral products by 15.8 per cent and energy products by 18.8 per cent. In volume terms, total imports edged down 0.1 per cent in March.

Imports in March were at C$70.40 billion, down from C$71.44 billion.

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One commonality in all these closures is the rush by Canadian bargain hunters to find deals. News coverage in the wake of the closures showed hundreds of Canadians lined up outside stores and hurriedly clearing out shelves once they got inside while lamenting that the sales weren’t good enough.

This not only demonstrated Canadians’ commitment to finding a bargain but also highlighted a buying trend that may be part of the problem in this country. We show up for a store opening and return for the store closing, but rarely do we see that support in between.

As a business owner, I can attest to the excitement of opening a new business. The community, the mayor, the local councillors, and your neighbouring businesses show up at the ribbon cutting and announce what a valuable part of the community you have become.

If you talk to most small business owners, however, you will quickly find that this wave of support dies quickly. Locals return to shopping at big box stores, and the struggle of running a small business ensues.

This trend is particularly glaring in rural communities, where if you drive through most small towns, you see windows covered in tattered paper blocking the view of interiors behind fading for-rent signs. In 2020, the number of small businesses in rural areas decreased by more than four per cent.

In my own region, one of these empty storefronts is now covered in election signs for one of the local candidates, raising the obvious question — what is being done by provincial and federal governments, not just to support small businesses but to educate the public that, if you don’t use it, you lose it?

According to Statistics Canada, in 2022, businesses with 1 to 99 employees comprised 98 per cent of all employer businesses in Canada and employed 10.7 million individuals, or 63 per cent of all employees. Further to this, small and medium-sized enterprises (SMEs) accounted for nearly half of the GDP generated by the private sector in 2020.

The loss of local businesses has a devastating effect on small communities. It drives consumers outside the region and eventually pushes residents out in search of better-served areas to live in.

The lack of ongoing support also makes it difficult for small business owners to focus on growing their enterprises. In 2023, 7.1 per cent of workers who were self-employed in their main job in Canada held multiple jobs, compared to 5.4 per cent of employees, according to Statistics Canada, suggesting that a significant portion of small business owners in Canada also hold another job.

In a recent wave of patriotism, Canadians are checking every package for a ‘made-in-Canada’ label. Few Canadians realize, however, that the biggest impact they can have on protecting Canadian business and sovereignty is to simply shop at their local small businesses. In doing so, you are supporting your neighbours, your rural communities, and those Canadian businesses who struggle to compete against big box stores, inflation, and tariffs.

It is up to Canadians to show up as often as possible. This act will encourage other small businesses and help rebuild rural communities.

Change doesn’t start with choosing an avocado grown in Mexico instead of the U.S.; it starts with choosing to support your community. Showing up, not just on opening day and closing day, but as often as possible, is the strongest act of resistance that Canadians can show in this trade war.

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“When I started 28 years ago, I think we were 60 strong, so it’s continued investment, continued growth, and that is what the company believes in – to continue to invest,” said Frank Both, the company’s vice-president of operations in Western Canada.

The family-owned egg company employs more than 300 people in the province, not counting its operations elsewhere in the country.

Its upcoming expansion will be the result of a $2-million investment announced Nov. 28 by the provincial and federal governments. Improvements at Burnbrae Farms are among 70 Manitoba projects earmarked for up to $15.4 million in government funds over four years.

Why it matters: Governments anticipate investments in processing will help keep value-added money in the province.

Funds are provided through the Sustainable Canadian Agriculture Partnership, with a goal to create more opportunities for the sale of local products and add jobs to the agricultural sector.

Manitoba relies on its producers, and agri-business brings in millions of dollars that fuel the provincial economy, said local MLA Diljeet Brar at a press conference announcing the Burnbrae Farms expansion.

“Businesses like Burnbrae Farms are significant contributors in this way, growing from dairy farming to becoming one of the country’s leading egg producers,” Brar said.

Such businesses strengthen the economy by providing healthy choices for consumers, leading to better community health, he added.

Manitoba Agriculture Minister Ron Kostyshyn also lauded the coming expansion.

“It shows that our province continues to be an excellent place to invest in the future. We all know agriculture has a long and rich history in our province, and this is vital to our economy,” he said of the funded projects in general.

Other recipients include pea protein company Roquette Canada Ltd., which opened its plant in Portage la Prairie in 2021; Kimberly Packaging Corporation in Winkler; and Spenst Bros. Premium Meats, also of Winkler.

“These companies’ achievements in ag produce means much success for all Manitobans. Our government is keeping our commitment in partnering with interest to invest in agriculture, innovation and sustainability,” Kostyshyn said.

“Roquette searched far and wide when looking for the perfect place to build our state-of-the-art pea protein plant,” said Roquette’s plant manager Chris Chinery, in a subsequent press release.

“We settled on Manitoba and more precisely, Portage la Prairie, because of the potential we saw for partnering with government to foster innovation and help create a hub for sustainable, plant-based ingredients that will help feed North America and the world. Over the years, we have been delighted to see that potential become reality and remain grateful for that partnership.”

Specific projects Burnbrae has in mind include a gable-top fill line, de-palletizers and palletizers, and an egg cargo system that will allow more expansion into robotics. A cluster valve system will also modernize and improve efficiency and quality.

“It keeps us competitive in the marketplace, and that’s important,” Both said. “Products from this plant are sold to retail food service and ingredient markets, not only here, but across Canada and some into the United States.”

Both expects approximately 15 new jobs to open at Burnbrae Farms thanks to the new funding.

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The new economic development office became the latest promise on the PC campaign trail Aug. 29, during a media event in Brandon.

“The office itself is not designed to just serve Brandon’s needs, it’s designed to serve all of Manitoba’s needs and certainly, specifically, to help focus attention on helping develop job creation projects in rural Manitoba and to help avoid overlap,” PC leader Brian Pallister said.

“There’s been a lot of that in the past,” he added, citing the typical jostling and local tax incentives normally seen between areas when a company comes to Manitoba looking to set up shop.

“We want to get away from that,” he said. “Manitoba has some growing advantages over our competitors and we want to make sure that we’re not stepping all over each other, that we’re going after more opportunities, not fewer.”

The office would help match business opportunities with suitable areas, according to Pallister.

A board of directors will oversee the office and will help align it with any economic development organizations communities already have, a release from the Progressive Conservatives said.

The office would be modelled on feedback from the Association of Manitoba Municipalities (AMM) and the Manitoba Chamber of Commerce. Both groups consulted with their stakeholders and advised the province during Pallister’s first term in office.

“There’s a lot more work yet to do in terms of developing what the agency would look like, how it’s going to be staffed,” Association of Manitoba Municipalities executive director Joe Masi said, in response to the announcement.

The AMM outlined a patchwork of rural economic development efforts during its talks with the province. Masi says he has seen frustration from entrepreneurs wanting to open businesses in Manitoba, but unclear on how to go about it.

“There needed to be an agency that could sort of pull together all the programs, kind of a one-stop shopping that would bring some coherent strategy to economic development,” Masi said.

That role would range from potential business owners needing guidance in rural Manitoba to municipalities looking to develop industry to helping match incoming companies with well-suited areas for their business, he added.

At the other end, he said, communities had to be poised to take advantage of those opportunities when they came along.

The AMM and organizations like EDAM (the Economic Developers Association of Manitoba) have introduced a new certification program and training modules to help address that issue. The program includes material on setting up a business feasibility study and taking the measure of the labour and infrastructure available in a given area.

The promised office does not have to host all the rural economic development initiatives, he added, “but they will certainly be the connector to get people through the red tape of what they need.”

Rural development has been a long-standing issue and the AMM has passed on its priorities, including economic development, to all parties in the upcoming election, he also noted.

Finer details of the project have yet to emerge.

Pallister could not say how much the office would cost to set up, where it would be located in Brandon or what staffing would look like, saying only that those details would depend on recommendations from the AMM and Manitoba Chamber of Commerce.

Pallister also acknowledged rural concerns with urban drain, a common complaint in areas watching their populations decrease in favour of urban areas. Certain business will be better suited for certain areas, he said, while the office’s role will be to find synergies.

“It’s making sure that we match the opportunity with the capital so that it can come and be put at risk in the right location to generate the maximum benefits to the company — obviously, that has to happen first — but also the ancillary benefits to us in terms of job creation, growing communities, improving services,” he said.

Private investment has been a repeat talking point for Brian Pallister’s Progressive Conservatives, both during the election and their term in government. The party recently released a target of 40,000 new private sector jobs in its second term if re-elected.

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The Economic Developers Association of Manitoba (EDAM) has launched its newly completed, eight-module certification program, dubbed Community Edge, and the first class has graduated, following the group’s spring forum in Roblin in mid-May.

“EDAM developed a strategic plan in 2013 and recognized that professional development was an important part of what we do, so this has been a long-term pro-cess, but we knew that we wanted an education product for our practitioners that was Manitoba driven, Manitoba focused, so that it was relevant to the communities and issues that we deal with in Manitoba,” Marilyn Crewe, economic development officer for Neepawa and EDAM chair, said.

While hardly isolated to rural areas, an economic development office has become a mainstay for communities and regions across Manitoba, either to manage growth, accelerate growth or to reverse a declining trend in an area bleeding industry and residents.

“I think that one of the things that we need to understand out of our communities is, what is there already? So what are the economic drivers that are currently present?” Crewe said.

For her hometown of Neepawa, agriculture has very much driven industry. Surrounded by farmland, the community is also home to HyLife Food’s pork-processing plant — a facility that unveiled two years and $176 million of upgrades, including a new cut floor, this April — as well as the Farmery Estate Brewery, which has made a name harvesting its own malt barley on site.

“Neepawa is a strong agricultural community, so then part of what I do is find ways to support that sector that is already strong, but to make sure that it has the things that it needs to continue to be prosperous,” Crewe said.

Lana Cowling-Mason, general manager of Community Futures West Interlake, echoed that message.

“Figuring out what the community’s assets are and what its competitive advantage is and building around that is so important and having a strategy that fully deals with that and making sure that everybody understands that any of this kind of development is a long-term investment in the community,” she said. “There’s no magic bullet that solves all the problems in the area.”

At the same time, Cowling-Mason said, municipal amalgamation has impacted how development offices are structured, and problems like budget constraints are evergreen.

“The other thing that we see is such a huge variety of the state the community is in when it decides (on) the investment in economic development,” she said. “So we have some small rural communities that are seeing some challenges about retaining population, retaining business. They kind of looked at it as, here is a way to invest in a kind of stop-gap measure to try and slow down concerns that they have. But we’ve also got communities that are booming and they need to have the economic development piece to help manage the growth that they’re in.”

Those different stages will come with a different ideal choice for development officer, Crewe said.

Community Edge does not isolate farm or rural issues, although Crewe says they are woven into the general topics of the program.

An overview of the program includes, in part, how to set up a community economic development office from the ground up, developing strategies according to community demographics and priorities, business retention and expansion, tourism, communication, strategic planning, marketing and project management.

“If it’s a rural community, if it’s an urban community, these core competencies will help them to do their job better and build stronger communities that have a base of their economy that is true to the community,” Crewe said.

EDAM is pushing elected officials, administrators and other public figures, including local members of the chamber of commerce, to also take the first modules of the program, something they say may help ease the bridge between community and economic development officer.

The May forum also recognized a second cohort who has passed EDAM’s equally new “training the trainers” program in the hopes they will help guide other economic development officers in the province moving forward.

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The OFA talked about how it is framing its election strategy at its annual meeting, which ran Monday and Tuesday in Toronto.

“With the election coming up, we need to talk about the benefits we have to offer all Ontarians beyond the food on their tables,” OFA president Keith Currie said.

Rural issues don’t resonate with urban voters who are “food comfortable” and more worried about traffic congestion, housing prices and their jobs than about food.

As a result, the OFA is making the case that rural areas and farms can help them out. There are some rural areas with an out-migration of population leaving behind less expensive housing and employers starved for workers.

But in order to build stronger rural communities, the OFA argues government investment is needed in the rural infrastructure that benefits both farmers and non-farmers. Urban residents take infrastructure for granted that rural residents can’t access, including natural gas for heating and broadband internet.

Top of the rural infrastructure list for the OFA is bringing natural gas to more areas of the province. That would mean cheaper home heating for farmers and non-farm residents and more economical power for factories and farms.

They are calling the strategy “distributed economic development” — the idea that economic development in one region will benefit the whole province, including people who live in cities.

Dr. David Freshwater, a professor at University of Kentucky who grew up in the Niagara Peninsula, supported the OFA message on economic development in his talk at the OFA convention.

With farmers such a tiny proportion of the population, and most economic policy being determined in the cities, he said that for urban residents, there needs to be a message to the cities that shows the value of rural economic policy to them.

“You need to create a positive message of rural opportunity,” he said.

That’s why the OFA message focuses on investments, not bailouts, and communities instead of commodities.

Currie spoke little about risk management, or farm income, or farm production practices when discussing provincial election messaging, although OFA works on all of those policy items.

“We need something different. Something bold. Something that will survive the test of time. What message can we bring to urban voters that will resonate with them?” he said.

The OFA has polled urban residents to see what they’re concerns are about living in rural areas. Their largest issues include concerns about access to good jobs and health care, along with a perception that rural schools offer inferior education.

Currie was quick to point out that the OFA isn’t advocating for unchecked growth of rural communities, as many of them already have areas available for development, or redevelopment.

“A fundamental condition and prerequisite is that farmland is protected even better than it is. Urban communities must respect our boundaries.”

The positive message about rural and agriculture and driving economic growth is easier to create with Canadian agriculture being pegged as a potential leader in creating economic growth across the country by the Barton Report — a federal government report by an expert panel that is guiding federal economic policy.

With the production of more than 200 commodities, a quarter of Canada’s farmers and $1.4 billion in farm gate output each year, agriculture in Ontario can be an economic powerhouse, Currie said.

“When we hear Mr. Barton speak of limitless potential, we need to take a much bigger approach.”

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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