First-quarter contraction marks second consecutive quarterly decline, signaling potential technical recession for Canada.
Canada’s economy shrank at an annualized rate of 0.1% in the first quarter of 2026, following a 0.2% contraction in the previous quarter. The decline reflects stagnant quarterly growth, with GDP unchanged from Q4 2025.
The back-to-back contractions meet the technical definition of a recession, though economists had anticipated a modest rebound. Weak consumer spending and subdued business investment weighed on output, offsetting gains in exports.
Markets may interpret the data as reinforcing expectations for potential monetary policy easing later this year.