Canada’s economy slipped into a technical recession in the first quarter of 2026 after real gross domestic product declined for a second straight quarter, according to new data from Statistics Canada.
The national statistics agency said Friday real GDP by expenditure was essentially unchanged on a quarter-over-quarter basis. On an annualized basis, the measure declined 0.1 per cent in the first quarter, following a revised one per cent drop in the fourth quarter of 2025.
The result fell well below economist expectations. Ahead of the release, the consensus forecast had pointed to 1.5 per cent annualized growth in real GDP for the first quarter.
The latest figures mean three of the past four quarters have now recorded negative real GDP growth in Canada. Two consecutive quarterly contractions meet some definitions of a technical recession, although economists often look at the length, severity and spread of weakness across the economy before calling a formal recession.
Statistics Canada’s report showed a mixed economic picture rather than a broad collapse. Higher imports of gold weighed on growth during the quarter, while increased business inventory accumulation helped offset some of the weakness.
Business capital investment declined for a fifth straight quarter. Slower resale activity in the housing market also dragged on first-quarter performance.
Resource and Construction Weakness Hit March GDP
On a monthly basis, real GDP fell 0.1 per cent in March. Statistics Canada pointed mainly to weakness in resource extraction industries and construction activity.
The two most recent quarterly declines were driven largely by contractions in October and March. Between those months, growth was either flat or modestly positive.
The agency’s early estimate for April suggests the economy rebounded sharply, with real GDP expected to rise 0.4 per cent for the month. Statistics Canada said the mining, quarrying, and oil and gas sectors returned to growth in April. Those preliminary figures are expected to be revised next month.
The report also showed some divergence between economic measures. Monthly real GDP by industry suggested mildly positive growth in the first quarter, while real GDP by expenditure showed an annualized contraction.
Such differences are common because the two measures rely on different data sources and methods.
Statistics Canada also said real GDP per capita rose 0.2 per cent on a quarterly basis in the first three months of the year, as Canada’s population declined for a second consecutive quarter.
The April estimate now becomes a key signal for whether the first-quarter weakness marked a brief setback or the start of a more sustained slowdown.
