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May 31, 2022CANADIAN ECONOMIC ACCOUNTS Q1 2022 
Canada’s Real Gross Domestic Product (GDP) increased 3.1% (all figures seasonally adjusted at annual rates) in the first quarter of 2022. This followed a gain of 6.6% in Q4 2021 and 5.3% in Q3 after a 3.1% decline in Q2 2021. Compared to pre-pandemic Q4 2019, the Canadian economy was 0.8% larger in Q1 2022.
Statistics Canada notes that growth in the quarter was supported by business investment and household consumption. The slowing of growth compared to Q4 2021 was due to a decline in export volumes including energy products.
Household consumption grew 3.4% in Q1, a faster pace than the previous quarter. Durable goods rose at a solid pace with higher spending on new cars, trucks, vans and sports utility vehicles but new automobile purchases remain lower than pre-pandemic levels due to supply chain issues. Services were up for a seventh consecutive quarter before remain 2.1% below pre-pandemic levels.
Residential structures rose for a second consecutive quarter with a 18.1% gain. Growth in renovations and resale were faster than new construction this quarter. New construction was led by the Atlantic provinces and declined in Alberta. Canadians added $33.9 billion in mortgage debt in Q1 2022, down from $44.8 billion in Q4 2021 as the Bank of Canada raised interest rates for the first time in two years.
Business investment was up for non-residential structures and machinery and equipment while declining for a third consecutive quarter for intellectual property products. Spending on Kitimat LNG project in British Columbia and oil and gas activity supported rising engineering structures investment this quarter.
Export volumes decreased 9.4% with goods declining 10.4% and services down 4.4%. Imports were down 2.8% as import volumes of goods (-3.7%) declined and service imports (+1.4%) rose.
Inventories were up $7.6 billion in Q1 2022 following $5.3 billion the previous quarter.
The terms-of-trade (ratio of price of exports to price of imports) increased in Q1 driven by higher crude oil, lumber, electricity and refined petroleum products. Import prices rose less but had higher prices for medicinal products and refined petroleum products.
The overall GDP deflator (reflects overall price of domestically produced goods and services) was up 12.3% on annualized basis with the higher exports prices, household fuel prices, and housing investment prices.
Nominal GDP increased 15.7% in Q1 following 15.2% the previous quarter. Annualized compensation of employees rose 16.0%.
Household disposable income was up 14.1% following two quarter of decline that were accompanied by lower government transfers to households. By the end of 2021, most government COVID-19 measures to support household had ended. Strong increase in compensation of employees, net mixed income, and property income support disposable income this quarter. Rising personal income tax and social insurance plan contributions were up. Statistics Canada noted that the household saving rate declined but remained elevated above pre-pandemic levels even with the rising cost of living.
Source: Statistics Canada. Gross domestic product, income and expenditure, second quarter 2020, Table 36-10-0103-01 Gross domestic product, income-based, quarterly (x 1,000,000), Table 36-10-0104-01 Gross domestic product, expenditure-based, Canada, quarterly (x 1,000,000), Table 36-10-0111-01 Current and capital accounts - National, Canada, quarterly
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