Retail sales remained steady at $67.6 billion in November, but a closer look at the bigger picture reveals underlying strength, according to Scotiabank economist Derek Holt in his research paper, The Underappreciated Canadian Consumer.
He aimed to counter the “incessant negative nellie nonsense about the Canadian consumer” and urged fellow analysts to “look at some facts” instead of selectively using data to support predictions of future Bank of Canada rate cuts.

In addition to the flat retail sales figure for November, the Statistics Canada report revealed sales down in six of nine subsectors, a 1% monthly decline in core retail sales, which exclude fuel and vehicle-related transactions, and a 0.4% drop in sales volumes.
However, Holt notes that retail volumes posted their strongest back-to-back quarterly gains in the second half of 2024 since 2017, excluding the post-pandemic rebound in 2020.
This takes into account StatCan’s advance estimate of 1.6% month-over-month sales growth in December.
It also suggests volumes rebounded by 1% in December, or perhaps as much as 2%, Holt added. “The trend is what matters and it all started at the beginning of 2024H2,” he said. “Retail sales volumes in m/m SAAR terms were up by 10% in July, 7% in August, 11% in September, 3% in October, fell by over 4% in November, and were up by double digits estimated to be 12%+ in December.”
The impact of the GST/HST holiday
Many have suggested that November’s weak performance was due to Canadian consumers postponing purchases to take advantage of the federal government’s tax holiday, which began in mid-December.
However, Holt believes the impact of the GST/HST holiday has been overstated.
“Key in not getting carried away with that spin is that the lion’s share of the GST/HST cuts in December affected categories of spending that are not included in the way Canada reports retail sales,” he wrote.
For example, spending on GST/HST-exempt food from restaurants made up about 40% of affected items, though it isn’t included in Canada’s retail sales. Alcoholic beverages, which accounted for nearly 20% of exempt items, were only partly included in retail sales (in stores) and partly excluded (in bars/restaurants).

“In other words, over half of the items targeted for the tax cut don’t even get captured by retail sales,” Holt explained.
In fact, there’s a great deal of consumer spending that doesn’t get captured in Statistics Canada’s retail sales report. This includes airfares, restaurants and bars, concerts and sporting events, hotels, financial services and more.

“Taylor Swift’s six T.O. concerts plus later ones in Vancouver? Not included in retail. Nor is any of the related spending on hotels, cabs, flights, restaurants, bars etc.,” Holt noted.
For that kind of spending, we need to turn to other sources, such as StatCan’s report on restaurant and bar spending (chart pictured at right), which shows “levels are robust and the recent trend is up.” Holt also points to 2024 air travel stats (chart pictured at right), which similarly aren’t captured in the retail sales report.
The problem with per-capita metrics
Holt also challenges the argument that per capita sales are down given the recent population surge.
He argues that much of the population growth has come from temporary residents, but since international students, temporary foreign workers, and asylum seekers don’t spend like Canadian-born citizens or permanent residents, they should be excluded from per-capita consumption calculations to avoid misleading results.
“The temps will be reduced under immigration policy changes going forward, and the ones who remain represent future spending and with that we should see spending per capita rebound—again, barring total calamity thanks to Trump,” Holt writes.
consumer spending derek holt retail sales scotiabank statistics canada
Last modified: January 23, 2025