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Economic News

Quebec’s GDP Contracted For A Second Consecutive Month

February 24, 2026
Florence Jean-Jacobs
Principal Economist

Highlights

  • Quebec’s real GDP fell again in November, down 0.3%, following a similar contraction in October (see table). The first 11 months of the year show growth of 0.7% relative to the same period in 2024 (graph 1).
  • The manufacturing sector continued to drag GDP lower in November, as it has throughout the year (graph 2). However, trends in services will also need to be monitored closely: after performing well in the first half of the year, services posted declines in both October and November. In fact, a majority of industries have been in retreat since the most recent peak in January 2025, amounting to an overall contraction of 1.4%.
  • In November, gains in retail trade (+0.7%) and electricity generation and distribution (+3.8%) were not enough to offset weakness in manufacturing (-0.8%), wholesale trade (-1.7%) and professional services (-1.9%).
  • November’s decline stands in contrast to a flat reading at the national level External link.. Canada’s preliminary estimate for December pointed to a modest 0.1% increase. If Quebec were to post a similar result in December, the fourth quarter would still end in negative territory—after the province had only just returned to growth in the third quarter.

Comments

Quebec is flirting with a likely economic contraction in the fourth quarter. While the pullback will probably be less pronounced than in the second quarter, it nonetheless signals an economy that has stalled. The stagnation is closely tied to the international trade environment: like Ontario, Quebec has been disproportionately affected by US tariff barriers—with an average effective tariff rate of 6.3% in November, compared with a Canadian average of 3.7%. New sector‑specific tariffs came into effect in October and November, hitting industries with a strong footprint in Quebec, including heavy trucks, softwood lumber, wooden furniture and cabinetry.

Implications

Given that we expect Canada’s real GDP to stagnate in the fourth quarter, it is not surprising to see Quebec pulling the national average down, given its higher exposure to the trade dispute with the United States. Solid performance in sectors less vulnerable to external trade is helping offset some of the weakness, but this is unlikely to be enough to generate growth for the final three months of 2025.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.