Canada’s new light vehicle market started 2026 with a modest decline, though analysts caution against reading too much into January’s results.

Estimated January sales reached 114,000 units, down 2.9% from the 118,000 units recorded in January 2025. The dip came against what industry observers describe as a particularly strong comparable.

“As we discussed two weeks ago, January is generally a small and volatile month that rarely acts as a reliable indicator of the year to come,” said Andrew King, Managing Partner at DAC. “This January in particular struggled to keep up with a very strong comparable leading to sales declines across nine provinces.”

At the provincial level, performance varied widely. British Columbia posted a marginal increase of 0.3%, the only province to show growth. At the other end of the spectrum, Newfoundland recorded a sharp 15.1% drop, while Nova Scotia declined 11.7%. Both Atlantic provinces were coming off strong January performances in 2025, amplifying the year-over-year decline.

Among Canada’s largest volume markets, Ontario and Quebec slightly outperformed the national average. Ontario was down 2.5%, while Quebec slipped 2.2%. In unit terms, Ontario’s decline was the largest in the country, though even there the drop amounted to just over 1,100 vehicles — hardly a dramatic contraction in a market of its size.

The January slowdown follows a 2025 calendar year that ultimately finished in positive territory, though not without volatility.

Nationally, 2025 sales reached 1.90 million units, up 2.0% from 1.86 million in 2024. December closed at 126,000 units, down 7.3% year over year, signalling softer momentum heading into 2026.

Provincially, results for 2025 ranged from a 3.2% annual decline in Quebec to an 11.7% gain in Nova Scotia. Saskatchewan (+9.6%) and Newfoundland (+8.9%) also posted strong growth.

“The provincial story of 2025 was undoubtedly Quebec coming down from significant ZEV-driven heights,” King noted, referencing the sales surge tied to zero-emission vehicle incentives in late 2024. Much of Quebec’s decline was concentrated in the fourth quarter, culminating in a 17.9% drop in December against what analysts described as an artificially inflated comparable.

British Columbia — also a ZEV-heavy market — posted a slight annual decline of 0.6% in 2025.

While most provinces recorded full-year gains, analysts point to broader weakness in Ontario, British Columbia and Alberta in the final quarter of 2025 as a potential concern.

For independent repair shops, a market hovering near 1.9 million units annually suggests a steady flow of late-model vehicles entering the car parc. However, the uneven provincial performance and late-year softness underscore ongoing economic uncertainty — and the importance of watching regional trends closely as 2026 unfolds.