Canada has officially slipped into a technical recession after the country’s economy recorded a second consecutive quarterly decline in real gross domestic product, according to new data released by Statistics Canada.
The agency reported that economic growth was essentially flat during the first quarter of 2026, translating into an annualized decline of 0.1 percent in real GDP. The weak performance follows a revised one percent contraction in the fourth quarter of 2025, marking two straight quarters of economic decline.
Economists widely view two consecutive quarters of negative growth as a technical recession, although analysts often examine the depth and spread of economic weakness before confirming a broader recessionary period.
The latest figures came as a surprise to many market watchers, as economists had projected annualized GDP growth of 1.5 percent for the first quarter.
According to Statistics Canada, several factors contributed to the slowdown, including weak construction activity, falling business investment, sluggish housing resale markets, and declining output from resource extraction industries.
Imports of gold also weighed heavily on economic activity during the quarter, offsetting gains from increased business inventory accumulation.
Business capital investment dropped for a fifth consecutive quarter, signaling continued caution among companies amid economic uncertainty.
Monthly GDP data showed a 0.1 percent decline in March alone, driven primarily by weakness in construction and natural resource sectors.
Despite the disappointing quarterly numbers, Statistics Canada noted that early estimates for April suggest a possible rebound, with real GDP projected to grow by 0.4 percent as mining, quarrying, oil, and gas sectors recover.
The report also highlighted mixed signals within the broader economy. While expenditure-based GDP showed contraction, industry-based monthly GDP data suggested modest positive growth during the first quarter, reflecting differences in calculation methods and data sources.
Canada’s population decline for a second straight quarter slightly boosted real GDP per capita, which rose by 0.2 percent during the first three months of the year.
Economists are now closely watching upcoming economic data and central bank decisions to assess whether Canada’s economy can regain momentum in the months ahead.
