Canada Retail Sales Rose Again in April Despite Tariff War

Hoodies in a souvenir store in Montreal, Quebec, Canada, on Tuesday, April 29, 2025. US President Donald Trumps threats have spurred many Canadians to band together in response, touting national unity and boycotting American products. Photo by Graham Hughes /Bloomberg

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(Bloomberg) — Canadian consumers kept on spending last month, defying a tariff war that threatens their employment and wealth. 

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An advance estimate suggests receipts for retailers rose 0.5% in April, Statistics Canada said Friday. That extended a 0.8% gain in March, which beat the median projection in a Bloomberg survey of economists. 

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The better-than-expected March figures came after retail sales fell in January and February on a seasonally-adjusted basis. Overall, they were up 1.2% in the first quarter, the fourth consecutive quarterly increase, as sales were boosted in the latter half of 2024 when the Bank of Canada’s interest-rate cuts boosted spending before US tariffs soured consumer confidence.

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March’s strong gain was driven by higher sales of cars and trucks, likely a result of Canadians trying to beat price hikes related to the Trump administration’s tariffs. The motor vehicle and parts sector rose 4.8%, up for the first time in three months, with higher sales at new car dealers driving the increase. 

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Excluding autos, sales declined 0.7%, lower than economist estimates.

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Core retail sales, which exclude gas stations and car dealers, rose 0.2% in March, led primarily by building material and garden equipment dealers, followed by clothing, jewelry and luggage retailers.

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Sales at gas stations and fuel vendors fell 6.5% in March after five consecutive monthly increases, as gas prices dropped that month.

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In volume terms, retail sales were up 0.9% in March.

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Regionally, retail sales increased in eight of 10 provinces. The largest provincial increase in dollar terms was in Quebec, which saw a 1.6% bump, with sales in its largest city of Montreal rising 3.1%.

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In Ontario, retail sales increased 0.6% in March, led by higher auto sales, but retail sales fell 1% in Toronto. The largest provincial decrease of 1.6% was in Manitoba, led by lower gas station sales.

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The statistics agency didn’t provide sectoral or provincial details for the April estimate. The figure was based on responses from 60.2% of companies surveyed, versus the average final response rate of 91% over the previous 12 months. 

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Data from DesRosiers Automotive Consultants suggests auto dealers enjoyed another strong bump in sales in April.

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—With assistance from Mario Baker Ramirez.

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