Canada retail sales rose again in April despite tariff war

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

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.

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.

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.

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

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.

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

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

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%.

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.

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.

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

—With assistance from Mario Baker Ramirez.