Canada retail sales rebound set to continue in September

By Laura Osman

(Bloomberg) — Canadian retail spending is on track to continue growing in September, although at a slower pace than in August.

An advance estimate from Statistics Canada suggests retail sales increased by 0.7% in September.

That follows a 1.2% boost in August with increases across all nine subsectors. Economists surveyed by Bloomberg expected sales to increase by 1.3% that month. Sales had dropped 0.8% in July, marking the first decrease since December 2025.

Sales also picked up in volume terms in August, increasing by 1.2%.

“Today’s report reinforces our view that Canadian households retain the capacity to spend, supported by accumulated wealth and resilient income growth,” said Maria Solovieva, an economist with TD Bank. 

Some economists had warned the August rebound may be temporary, given the September trade war escalation with the U.S. Canada’s economy seemed to shake off a tariff-induced slump in the second quarter, but gross domestic product flattened in July and August.

The retail data is the final clue Bank of Canada policymakers will receive on the health of the Canadian economy before next week’s rate decision. Several traders and economists flipped their calls in the last week and are now betting on a hike.

Traders in overnight swaps had put the odds of a rate hike at next week’s meeting at over 80%, and were unmoved after the release.

Thursday’s retail sales report shows the biggest increase in August was recorded by new car dealers, which climbed by 1.5% after falling by 1.4% the previous month.

Excluding autos, retail rose 1.2% in August, led by higher sales for food and beverage retailers, which posted their first increase in three months.

Retail sales increased in six provinces, led by a 2.2% jump in Ontario. Consumer spending in Toronto climbed 4% after falling 4.7% in July. Meanwhile, Alberta posted the largest decrease, with sales down 0.1%.

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Last modified: October 23, 2026