March 2, 2018 12:38 pm

Canadian economy grows at 3 per cent in 2017, fastest pace in 6 years

Economic growth clocked in at a strong 3 per cent growth in 2017, but the economy's pace slowed down in the second half of the year.

Geoff Robins/CP

The Canadian economy ended a strong year with 1.7 per cent annualized growth over the final three months of 2017. For the full year, Statistics Canada says the economy grew three per cent, the fastest pace since 2011 and significantly above 2016’s growth of 1.4 per cent.

But economic growth geared down in the second half of last year after clocking in at an average 3.6 per cent rate between July of 2016 and June of 2017.

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“The main message … is that the exciting growth from the middle of 2016 up until the middle of 2017 is now truly in the past, and the economy is back to the drudgery of slogging out something closer to potential of around 2 per cent,” BMO Financial Group chief economist Douglas Porter wrote in a note to clients.

With an international trade environment looking increasingly uncertain, among difficult NAFTA talks and newly announced U.S. tariffs on steel and aluminum, the Bank of Canada will likely proceed cautiously with further rate increases, several big-bank economists noted.

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“We continue to expect the Bank to move to the sidelines until the second half of this year,” Porter wrote.

The report says fourth-quarter growth was driven by a 2.3 per cent increase in business investment compared with the third quarter, and a 0.5 per cent quarter-over-quarter increase in household spending.

For all of 2017, StatCan says household spending easily made the biggest contribution to growth, followed by inventory and business investment. It also says Canada’s exports grew for the second-straight year with gains in both goods and services.

With files from Global News national online money reporter Erica Alini

© 2018 The Canadian Press

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