Continue Reading Below ADVERTISEMENT The Bank of Canada said earlier this month that recent momentum was due to temporary factors, and expected growth to slow starting in the middle of this year. Furthermore, uncertainty over U.S. trade policy -- which escalated in recent days -- is bound to provide cautious Canadian firms with further reason to curb back investment and hiring plans. The Bank of Canada has said the risk of U.S. protectionism represented a significant threat to the Canadian outlook. President Donald Trump said this week he considered issuing a formal withdrawal from the North American Free Trade Agreement, but decided instead to proceed with renegotiations after speaking to leaders from Canada and Mexico. Mr. Trump also backed a new 20% tariff on Canadian lumber imports, and has warned of repercussions for Canada due to its protected dairy sector. Canada's GDP report for February said output in the manufacturing sector fell 0.6%, on declines in transportation equipment, wood products, and plastic and rubber. Also, mining fell 3.6% in the month, led by decreased copper and nickel extraction. Providing a lift for the economy in the month was the real estate component, which grew 0.5% in February. The data agency attributed strength to "notable gains" in activity around the Toronto region. Authorities in the province of Ontario introduced this month measures to curb frothiness in the Toronto market, in an effort to rein in speculators and reduce the influence of foreigners on price gains.

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