Canada has technically slipped into a recession for the first time since 2020, by one definition, but the figures don't point to anything on the level of an economic crisis. Economists had expected growth of 1.5%, but Statistics Canada reported Friday that real GDP slipped at an annualized rate of 0.1% in the first quarter, following a 1% drop in the final quarter of 2025. That makes two straight quarterly declines—enough to fit the textbook definition of a "technical recession"—and marks negative real GDP in three of the last four quarters, CTV News reports. On a quarterly basis, however, GDP was unchanged against the last quarter of 2025, meaning that by that measure, it doesn't meet the definition of a recession, reports Reuters.
Under the hood, the story is mixed. A jump in gold imports weighed on growth, while businesses building up inventories offered some support. Business investment fell for a fifth quarter, and a weak resale housing market added to the drag. StatCan pointed to softness in resource extraction and construction for a 0.1% GDP drop in March. Yet early estimates suggest April may have snapped back with 0.4% growth as mining and oil and gas rebounded. Canada's economy has largely remained resilient amid trade disputes with the US, but tariffs and uncertainty about the future have affected hiring and investment, Reuters notes.
- BMO chief economist Douglas Porter says the first-quarter dip is tiny enough to be "easily revised away," but there are underlying issues to be concerned about. In a note to economists, he wrote: "While there will be plenty of debate over whether this constitutes a recession (we would say 'no, not really'), there is little debate that the economy has struggled to make any headway over the past year amid the ongoing trade conflict."
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