TORONTO—Canadian factory activity expanded at its fastest pace on record in December as new orders and production climbed, while manufacturers grew more optimistic that output would continue to rise in 2021, data showed on Monday. The IHS Markit Canada Manufacturing Purchasing Managers’ index (PMI) rose to a seasonally adjusted 57.9 in December from 55.8 in November, the sixth straight month that the PMI was above the 50 threshold that marks expansion in the sector. It was the highest level for the index since the survey began in October 2010. The data “indicated the Canadian manufacturing sector concluded 2020 with a record month-on-month improvement in business conditions,” Shreeya Patel, an economist at IHS Markit, said in a statement. “New orders and output supported the latest rise with robust increases registered.” Demand conditions continued to improve in both domestic and foreign markets, said IHS Markit, adding that the rise in new work …