Statistics Canada (StatsCan) released its retail trade report for July yesterday, which showed consumer spending cooled after a stronger June. Retail sales have grown over 2026, suggesting Canadian consumers have been resilient despite trade and geopolitical tensions. Sales have also gotten a boost by higher prices, particularly at the gasoline pump. While July’s decline was discouraging, sales may have bounced back in August. 

Retail sales dropped by 0.7% unveiled by European Commission President Ursula von der Leyen a day earlier, would deepen co-operation on trade, student and worker mobility, critical minerals and energy, AI safety standards and joint Arctic projects.
On a year-over-year basis retail sales rose by 5.1% in July.
Sales at motor vehicle and parts dealers posted their first decline in four months, falling by 0.8%, driven by a 1.3% drop at new car dealers. Sales at gasoline stations also declined, despite higher
prices at the pump.
Core retail sales, which exclude gasoline stations and motor vehicle dealers, also fell 0.7%, with
general merchandise stores leading the pullback, down 1.9%. Conversely, sales at building material and garden equipment stores increased, rising by 0.8% over the month.
An early estimate from StatsCan showed a 1.3% rebound in retail sales for August, although the agency cautions that figure is preliminary and subject to revision. This would mark the sharpest
pace of growth since January 2026.

July’s pullback is a reminder that consumer spending remains sensitive to swings in prices, borrowing costs and trade-related uncertainty. The decline in July was the first since December 2025. If August's rebound holds up once final data arrives, it would suggest households are still willing to spend, but for now the retail sector’s momentum looks more fragile than it did earlier this year.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.