Canada's Q1 2026 GDP contracts, second quarterly decline

Canada’s economy stalled in the first quarter of 2026, marking a second consecutive quarterly decline in real gross domestic product, according to data released by Statistics Canada. The contraction meets a common definition for a technical recession, though the agency’s report described a complex and mixed economic picture.

Real GDP, measured by expenditure, was essentially unchanged on a quarter-over-quarter basis. When converted to an annualized rate, a key metric for economists, this resulted in a decline of 0.1 percent for the first quarter. This follows a revised drop of one percent in real GDP during the fourth quarter of 2025. The data shows three of the last four quarters have now posted negative growth.

The first-quarter performance fell significantly short of expectations. Economists had anticipated annualized growth of 1.5 percent ahead of the release. Statistics Canada identified several factors behind the weakness, including higher imports of gold, which dragged on activity, though this was partly offset by businesses accumulating more inventory. Business capital investment fell for a fifth consecutive quarter, and weak resale activity in the housing market also...