OTTAWA — Canadian retail sales in November were flat compared with October, but an early estimate by Statistics Canada pointed to a rebound in December which saw the start of Ottawa’s GST/HST holiday.

The agency said Thursday overall retail sales totalled $67.6 billion in November, relatively unchanged from October.

BMO senior economist Shelly Kaushik said if Statistics Canada’s preliminary estimate of a 1.6 per cent gain in retail sales in December holds, it would be the largest gain in two years.

“A disappointing November showing for retail sales was likely coloured by timing, as a late Black Friday and a mid-December start to the GST/HST holiday kept consumers on the sidelines in the latter part of the month,” Kaushik said.

“A solid December flash estimate, and an otherwise decent showing in the second half of the year, support that view.”

Ottawa announced in late November a temporary GST/HST break on certain items ahead of the busy holiday shopping season. The break started on Dec. 14 and will continue until Feb. 15.

“Looking beyond the temporary tax relief, lower policy rates should continue to support spending in 2025, but an uncertain trade environment could add meaningful headwinds,” Kaushik said.

The retail sales figures come ahead of the Bank of Canada’s next interest rate decision set for Jan. 29 when it will also release its monetary policy report.

CIBC senior economist Katherine Judge said the two-month change in spending implies lower interest rates are working to boost consumer spending, but ample lost ground remains to be made up.

“Further interest rate reductions are clearly needed, with inflation below target, and downside risks from the threat of tariffs on Canadian exports to the U.S.,” Judge wrote in a report.

For November, Statistics Canada said sales at motor vehicle and parts dealers rose two per cent, while gasoline stations and fuel vendors saw an increase of 0.7 per cent.

Sales at food and beverage retailers fell 1.6 per cent for the month as sales at supermarkets and other grocery retailers, except convenience stores, dropped 1.5 per cent.

General merchandise retailers saw a one per cent decline for the month.

Core retail sales — which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers — fell one per cent in November.

In volume terms, overall Canadian retail sales dropped 0.4 per cent in November.