Source: The EPOCH Times, May 29, 2026
[Here they go again with more BS….the government doesnt want to admit the economy is in a serious downturn and they definitely do not want to address the problem causing a lot of suffering for many Canadians, rising prices, not high prices, but the constantly rising prices. So to avoid addressing this problem, the govt distracts you with a seemingly less intense message…”The economy is slowing down a wee bit but it is nothing serious. Try explaining that to the single mother scrambling to make ends meet so she can feed her two kids. Comment by Richard Szpin]
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Canada’s economy saw no growth in the first quarter of 2026 following a decline in the final quarter of 2025, according to Statistics Canada data released on May 29.
When annualized, the data points to GDP contraction in two consecutive quarters, which meets the technical definition of a recession. Before the data was released, economists had largely expected growth of 1.5 percent of GDP on an annualized basis in the first quarter of 2026.
On a quarterly basis, Canada narrowly escapes the technical definition of a recession, given GDP fell 0.2 percent in the last quarter of 2025, and came in flat in the first quarter of 2026.
The last time Canada entered a technical recession was during the oil shock in the mid-2010s and at the beginning of the COVID-19 period. At that time, GDP was negative for two consecutive quarters on an annualized and quarterly basis.
While real GDP remained flat in the first quarter, there was an increase of 0.2 percent in GDP per capita due to a shrinking population, says Statistics Canada. GDP per capita is often used to measure prosperity and quality of life.
The statistics agency says imports rose by 2.9 percent in the first quarter of 2026, with metal products and scrap metal making up around half of the rise, and both being driven by imports of gold. When excluding the two categories, imports rose by just 1.2 percent, being led by vehicles and industrial machinery.
Imports of pharmaceuticals and medicinal products fell in the first quarter, as did travel imports given that fewer Canadians travelled internationally.
After Canadian exports had grown by 1.6 percent in the final quarter of 2025, they fell by 0.1 percent in the first quarter of 2026. The decline was led by fewer exports of passenger cars and light trucks, which have been impacted by U.S. tariffs. This decline in exports was compensated by higher exports of oil and natural gas.
Business investment in residential structures also fell by 2 percent in the first quarter of 2026 after a 2.4 percent decrease in the fourth quarter of 2025. Business capital investment fell by 0.7 percent in the first quarter of 2026, with a decline in engineering structures being moderated by increased spending on machinery, mineral exploration, software, and non-residential buildings.
The Statistics Canada report also found that household savings has fallen to its lowest point in two years at 3.5 percent. It said that while compensation of employees increased in the first quarter of 2026, declines among other income sources, such as self-employment income and net investment income, weighed on disposable income.
The Bank of Canada had forecasted in late April that after the economy contracted in the fourth quarter of 2025, it would resume growth in early 2026 due to consumer and government spending supporting economic activity. The bank has projected the Canadian economy will grow by 1.2 percent in 2026, down from 1.7 per cent in 2025.
The bank also said that while higher oil prices from the Iran war were leading to inflationary pressures that could require higher interest rates, the potential for more U.S. tariffs and a further economic slowdown could lead to the bank needing to cut interest rates further. The Bank has kept interest rates at 2.25 percent for four straight meetings.
