In Q2, Statistics Canada reported a sharper-than-expected economic downturn, with GDP contracting at a -1.6% annual rate as tariffs and trade uncertainty weighed heavily. Exports fell 7.5% and business investment slipped 0.6%, though household spending rose, driven in part by stronger automotive sales. Economists caution, however, that consumer demand may not be sustainable given the broader economic headwinds.

August’s light vehicle sales reflected this fragility. Sales totaled 160,000 units, down 2.9% year-over-year and well below the 2017–2019 August averages of 180,000-plus. It marked the first annual decline since February 2025, with the SAAR falling to 1.76 million—the lowest so far this year. Performance varied widely across automakers, but overall momentum was weak. With trade negotiations unresolved and tariff pressures ongoing, the industry remains in a holding pattern, awaiting clearer direction.