Canada Enters Technical Recession With 0.1% Q1 GDP Drop as April Output Rebounds 0.4%
Updated
Updated · Toronto Star · May 29
Canada Enters Technical Recession With 0.1% Q1 GDP Drop as April Output Rebounds 0.4%
8 articles · Updated · Toronto Star · May 29
Statistics Canada reported a 0.1% annualized contraction in first-quarter real GDP, following a revised 1.0% drop in Q4 2025 and leaving three of the past four quarters negative.
A surge in gold imports, a fifth straight quarterly fall in business capital investment, weak home resale activity, and softness in resource extraction and construction drove the downturn.
March GDP by industry fell 0.1%, but StatCan's early estimate points to a 0.4% rebound in April as mining, quarrying, and oil and gas returned to growth.
The picture remains mixed: expenditure-based GDP contracted, while industry-based monthly data suggested mild first-quarter growth, and GDP per capita rose 0.2% as Canada's population shrank for a second straight quarter.
The result missed economists' expectations for 1.5% annualized growth and underscores uncertainty over whether the two-quarter decline amounts to a broader recession.
With household debt at G7 highs, how vulnerable are Canadians to this downturn, even if the resource sector rebounds quickly?
Can a booming minerals sector rescue Canada's economy from a technical recession and its decade-long investment slump?
Is this recession a temporary blip, or a symptom of deeper structural problems that current government strategies cannot fix?