Canada's real gross domestic product (GDP) expanded by 0.5 per cent in April, surpassing economists' expectations and providing a robust start to the second quarter of 2026. The growth follows a technical recession in the first quarter, when the economy contracted at an annualized rate of 0.1 per cent.
Key Sectors Driving Growth
The mining, quarrying, and oil and gas extraction sector led the gains, surging 2.9 per cent month-over-month in April, according to Statistics Canada. This marked the sector's largest monthly increase since February 2024 and more than offset a 1.4 per cent contraction in March. The manufacturing sector also rebounded, growing 0.6 per cent after a 0.1 per cent decline in March, driven by durable-goods manufacturing.
The construction industry expanded 0.7 per cent month-over-month, its first increase in five months. Other sectors contributing to growth included transportation and warehousing, real estate and rental and leasing, finance and insurance, and public administration.
Outlook and Recession Context
Statistics Canada's flash estimate for May suggests the economy grew 0.1 per cent, supported by gains in real estate but partially offset by contractions in wholesale trade and agriculture, forestry, fishing and hunting. The April performance comes after Canada entered a technical recession in the first quarter of 2026, defined as two consecutive quarters of negative annualized GDP growth.
Economists had broadly anticipated the April expansion, though the 0.5 per cent increase was slightly above consensus forecasts. The data provides a positive signal for the economy as it rebounds from the earlier downturn.
