Canada's Q1 2026 GDP shrinks 0.1% marking technical recession

Canada’s economy contracted slightly in the first quarter of 2026, marking two consecutive quarters of decline and meeting the common definition of a technical recession. Statistics Canada reported that real gross domestic product shrank at an annualized rate of 0.1 percent in the first quarter, following a revised one percent contraction in the final quarter of 2025. The result fell far short of economists’ forecasts for 1.5 percent growth.

The agency cited weak business investment, lower government spending, and a decline in construction and resource extraction activity as primary factors in the downturn. Business capital investment fell for a fifth consecutive quarter. Higher imports, particularly of gold, also weighed on the quarterly figures, though this was partly offset by businesses accumulating more inventory. On a monthly basis, real GDP declined 0.1 percent in March.

Despite the consecutive quarterly declines, some economists cautioned against declaring a formal recession, noting the economy showed modest growth or was flat in four of the last six months. The data presented a mixed picture, with early estimates for April pointing to a rebound of 0.4 percent growth,...