Early signs of an economic rebound in the second quarter should put to rest any talk of Canada being in a recession, according to economists parsing the latest gross domestic product figures.
Statistics Canada reported Friday that real GDP rose 0.3 per cent in May amid growth in both the goods and services sides of the economy. That topped StatCan’s own initial estimate for 0.1 per cent growth in the month.
Andrew Grantham, senior economist at CIBC, said growth was fairly broad-based in May.
With expectations for 0.2 per cent growth in June, StatCan’s advance estimates now point to a 3.4 per cent annualized gain in the second quarter.
If those figures hold, it would mark a sharp rebound from a mild contraction in the first quarter of the year.
“We always expected a rebound. The fact that the rebound that we appear to be seeing in Q2 is even stronger than we were initially expecting … should put the final exclamation mark on the fact that Canada is not currently in a recession,” Grantham said.
StatCan pointed to growth in oil and gas extraction as well as a resurgent housing market as a couple of the industries fuelling growth in May.
Grantham noted that these sectors were both bouncing back from temporary drags in the first quarter — early maintenance activity weighed on oil and gas output, while harsh winter weather put a chill on home sales.
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Other temporary factors like hiring for the census and FIFA World Cup games in June also likely gave the economy a lift in the second quarter, Grantham said.
StatCan said offices of real estate agents and brokers saw activity increase 5.1 per cent in May — the subsector’s biggest monthly jump since October 2024. Despite the recent gains, Grantham noted the housing market is by no means strong right now.
Construction, manufacturing and the finance and insurance sectors all grew for a second consecutive month and the public sector also expanded in May.
TD Bank economist Marc Ercolao said most recent data hasn’t shown much evidence of a meaningful downturn.
“It’s increasingly looking like the stalling of growth in the first quarter was more reflective of temporary drags and volatility rather than a meaningful deterioration in underlying activity,” he said in a note to clients.
BMO chief economist Doug Porter said in a note that the small dip in the first three months of the year “overstated the economy’s weakness,” and the truth of Canada’s current output probably lies in the average between the two quarters.
Porter expects growth will moderate in the second half of the year from the second quarter’s robust pace. High fuel costs and U.S. President Donald Trump’s latest tariff threat against Canada should put a chill on growth, he argued.
But Porter, too, said the economy is still “grinding ahead” despite rumblings of a technical recession a few months ago.
“Today’s well-rounded reading provides further evidence that the economy has broken free from the growth lull around the turn of the year,” he said.
StatCan will release its official estimates for the second quarter when it reports June GDP figures at the end of August.
The Bank of Canada is scheduled to make its next interest rate decision on Sept. 2, a few days after that release. The central bank held its benchmark interest rate steady at 2.25 per cent earlier this month and has so far been on hold for all of 2026.
At the start of this year, the Bank of Canada had expected GDP growth to average around 1.5 per cent across the first and second quarters.
After the first-quarter miss, the central bank raised its outlook for a 2.5 per cent increase in the second quarter — a forecast that could end up short of the mark if StatCan’s flash estimates hold.
Grantham said that, taken together, results for the first and second quarter are close to the Bank of Canada’s expectations and likely won’t throw the central bank too far off its current course.
He said he expects growth will cool back below two per cent in the third quarter amid new U.S. tariff headwinds.
Ercolao also said the May GDP print does little to change the narrative for the central bank, which TD expects to remain on the sidelines for the rest of the year.
“Growth is proving resilient enough to forego additional rate relief, while contained inflation readings, lingering labour market slack and ongoing trade uncertainty argue against a shift toward a more restrictive stance,” he said.
Financial market odds for an interest rate hold at the Bank of Canada’s September meeting stood at nearly 97 per cent as of Friday at noon, according to LSEG Data & Analytics.
Tony S.
August 1, 2026 at 5:55 am
Ben Misses in the article there was negative growth in Q1 and acts like Canada is in a boom.
Ben is a f8cking m*ron. Period
Canada was the only G20 country that had negative growth in both Q4 2025 and Q1 2026. Quite a feat for Carney.
Ben Misses in the article there was negative growth in Q1 and acts like Canada is in a boom.
How do you see Ben’s swing? Pepper, tweezers and a magnifying glass.
Please join in the Pride parade with Trudeau, Carney, and myself.
Doesn’t matter what is real or not real, fact or not. Liberal butt suckers will always be Liberal butt suckers, Liberal haters will always be Liberal haters and trolls will always be trolls. The human race is screwed. Good luck living underground in 30 or 40 years. You all deserve it.
Doesn’t matter what is real or not real, fact or not. Liberal butt suckers will always be Liberal butt suckers, Liberal haters will always be Liberal haters and trolls will always be trolls. The human race is screwed. Good luck living underground in 30 or 40 years.
Global news comrades are hard at work.
Doesn’t matter what is real or not real, fact or not. Liberal butt suckers will always be Liberal butt suckers, Liberal haters will always be Liberal haters and trolls will always be trolls. The human race is screwed. Good luck living underground in 30 or 40 years.
Strange that Ben celebrates a very mediocre number for May. Liberals must be desperate for any positive result considering there poor handling of the economy.
Hey Ben. 1 month doesn’t make a trend after the last 2 quarters we’re in contraction. Also Carney promised the “best” in the G7 not the worst for advanced economies in the OECD.
One of the highest rates of Growth in the G7! Once again the Carney government scores.
@At anonymous. 1 month isn’t a trend. Let us know how Q2 ends up.
I realized Mark Carney has not delivered on any of his election promises and you lost your job. Never mind than. Please join Mark and me at the Pride Event. Thanks
Canada is really struggling with Mark Carney. He promised a lot and hasn’t delivered. His runway will quickly run out if he doesn’t deliver .
@ anonymous. The topic maybe the GDP but the reality is the INFLATION that is getting out of control and Canadians are seeing it in the stores and feeling it in their wallets
Truth be told, Carney has been a total disappointment at all levels since becoming All hat and no cattle and has bowed to Trump and kissed the MAGA ring. No impressed.
Just wait till the new Trump tariffs dig in as Carney is unable to negotiate a deal with the USA, and that number will plummet. It is Carneys fault as he didn’t follow up on his promises from the 2025 Election. The only thing up other than Elbows will be unemployment.
Liberals want Canadians to thank them for not being in a recession. Regardless, Canadian growth is basically flat and all the predictions will end up not being realized like usual.
@ Derek Hunter – monthly growth not annual growth. Do the math.
0.3% is very meagre growth as defined by any Economist. Not sure why Liberal/ Carney bootlickers are doing victory laps here pretending otherwise.
Canada economy has been on life support for many years now. Typically the rosy predictions get scaled back as the year progresses. Unfortunately Trudeau and Carney bet on the wrong things (EV Battery Plants) and blocked projects that could add substantial additions to the GFP because of various excuses. Carney was Trudeau economic advisor from 2020-2025 and what a disaster that was.
Interesting. We talk about Stats Can “predictions” of it suits. Just two years ago, Canada was “predicted “ to have one of the weakest performing advanced economies in the OECD. That prediction has been correct and the Stats Can, not so much. The last two quarters 2025 Q4 and 2026 Q1 Canada had negative growth. The only country in the G20 to do so.
@ Canada is Weak – Stats Can results for the first 2 months of the 2nd quarter and their prediction for all 3 months is what we have. 0.2% in each month for 12 months is ~2.425% annually. 0.3% in each month for 12 months is ~3.65% annually.
I have given plenty of facts to counter the empty “Carney has done nothing” opinions. You want facts, feel free to bring them instead of this howling. You folks are like dogs calling and responding after dark.
When the data is in in 6 months you folks are going to be howling that Carney made it snow. Tick tock. You are going to have to find other material.
@Anonymous. We are not looking for Statistics Canada “predictions” , just the final numbers. I recall stats Canada predictied strong growth last year also that didn’t come to be. Just the facts please.
Wow! What a completely mediocre number. Aim for the lowest possible standard, fail to achieve anywhere close to it and then celebrate it. Really well done team elbows up.
Carney had Statistics Canada change the negative (-) to a positive (+).
@Anoymous. We will see how the next quarter comes out. Lol Again, carney promised the “best” economy in the G7 and he isn’t even close to that goal.
@ Tony Neopolitano – Statistics of the World and Stats Can say otherwise. 1.5% so far in 2026. The forward projection for 3.4% annualized in the 2nd quarter is very good and you know it. Asserting nonsense does not make it true, no matter how loudly you do it.
The doubleplusungood duckspeakers engaging in their 2 minutes Carney hate are going to have to get new material very soon.
As Anonymous said below: “Carney is better at doing what conservatives want done than the conservatives are.”
I truly believe it is PPs fault that both Trudeau and Carney can’t keep their promises or deliver for Canadians after 10 years
@Anonymous. Perhaps you do as Carney not deliverying on his promises.
In over 16 months. Carney per quarter has either delivered stagnant growth or negative growth. Not a statistic to be proud of. Quite a disgrace so far.
@ Harvey Balla – Would you like a hug?
Carney promised the best economy in the G7. More fake promises and gaslighting Canadians.
@ Willow – the topic is GDP. The goalposts stay right where they are.
Trying hard to make it sound really good about the GDP but Canadians are still seeing prices for groceries going up every week. It’s all smoke and mirrors to try making the government look good but Canadians know better.
@ Ed and Shawn Molnar – For 2026 so far, among the G7, the site Statistics of the World has the US GDP growth @ 2.1% and Canada is 2nd @ 1.5%. From this article: “StatCan’s advance estimate has real GDP rising 3.4 per cent on an annualized basis in the second quarter”.
Do you two need help with the big words?
Energy superpower, Major Projects Office, Foreign Direct Investment rate double the US. Job growth rate double the US.
Carney is better at doing what conservatives want done than the conservatives are.
Don’t expect any improvement. I heard Carney is going to appoint his pal Jughead Singh to an important Tourism / Economic Development position in which Singh has no expertise or skill sets for. Singh ran the NDP into the ditch.
Glad to see Trump tariffs are really digging in. So many companies are moving to the USA for greener pastures. This could all be dodged if Carney could make a deal as he promised to be done basically a year ago. Epic failure on every level by the Liberals
Canada has the worst economy in the G20. Carney campaign promise was Canada would have the best economy in the G20. More broken promises and false hope
Of course Poilievre conservatives will complain about this good news, because that’s all they do. Whine, complain, and fly to the US on the taxpayer dime to talk to their heroes in the Trump administration.
Even good news completely baffles the Conservative keyboard warriors on here. When your rock bottom has a basement you voted Conservative. Bahahaha Bahahaha
This is nothing to celebrate. An average of 2-3% GDP growth is considered good in a given year. If we ever hit that mark, then I’ll celebrate.
Another pathetic increase caused by inflation, not growth.
Epic Failure. Carneys Canada is treading a swirling toilet
In other news the chocolate ration will be raised to 20 grams a week.
Ok. Oejdmdjskwndnd927473828
USA GDP per capita is much better. Did Canada hire more Uber Eats driver?
Whoopd*efrigging doo. Where’s the other 99%? A whole 0.3%……My god this country is flat line.