{"id":509696,"date":"2026-05-30T02:49:14","date_gmt":"2026-05-30T02:49:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/509696\/"},"modified":"2026-05-30T02:49:14","modified_gmt":"2026-05-30T02:49:14","slug":"canada-falls-into-recession-for-the-first-time-since-pandemic","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/509696\/","title":{"rendered":"Canada falls into recession for the first time since pandemic"},"content":{"rendered":"\n

Canada has slipped into a technical recession<\/a> for the first time since the pandemic, after Statistics Canada reported on Friday that the economy contracted for a second consecutive quarter, a result that caught economists and markets by surprise.<\/p>\n

Real GDP fell 0.1 per cent on an annualized basis in the first quarter of 2026, following a revised 1.0 per cent decline in the fourth quarter of 2025, the agency said. Two consecutive quarters of negative annualized growth meet the most widely used definition of a technical recession.<\/p>\n

Analysts polled by Reuters and the Bank of Canada<\/a> had forecast growth of 1.5 per cent for the quarter.<\/p>\n

The Canadian dollar weakened after the data dropped, falling 0.28 per cent to C$1.3819 per U.S. dollar, according to Reuters. Two-year government bond yields slipped 7.7 basis points to 2.430 per cent.<\/p>\n

Related: Bitcoin and Wall Street bleed after U.S. economy loses 92K jobs<\/a><\/strong><\/p>\n

What dragged Canada’s economy down <\/p>\n

Statistics Canada pointed to two main culprits: a spike in gold imports and a weak March for Canada’s resource extraction industries. Higher imports reduce GDP because they represent money flowing out of the domestic economy rather than being spent at home.<\/p>\n

On the export side, gains in crude oil and natural gas <\/a>shipments were largely offset by a sharp drop in passenger vehicle and light truck exports, a direct consequence of U.S. tariffs hitting Canada’s auto sector<\/a>.<\/p>\n

Business capital investment fell 0.7 per cent in the first quarter, its fifth consecutive quarterly decline, as companies held back on spending amid trade uncertainty. Household spending<\/a> was a rare bright spot, growing in financial services and food but that was mostly cancelled out by weaker business and government investment.<\/p>\n

Dan Kelly, president of the Canadian Federation of Independent Business, said that tracks with what he is hearing on the ground.<\/p>\n

\n

“Most businesses are basically in a holding pattern, they’re treading water, hoping for brighter days,” <\/strong>Kelly told CBC News<\/a>, adding that the confidence needed to invest simply is not there among business owners right now.<\/p>\n<\/blockquote>\n

Trending on TheStreet Roundtable: Is it actually a recession? <\/p>\n

Economists are divided.<\/p>\n

“The trade-induced contraction in GDP<\/a> last quarter meant the economy tipped into a technical recession at the start of the year,” Capital Economics said in a note<\/a>, adding that rising oil and gas activity suggest the economy likely rebounded in April.<\/p>\n

Randall Bartlett, deputy chief economist at Desjardins Group, pushed back, saying his firm is not prepared to call it a recession, arguing the weakness was not widespread enough across the economy to warrant the label, Reuters reported.<\/p>\n

It is worth noting that the previous two technical recessions, during the pandemic in 2020 and the oil shock in early 2015, both saw consecutive declines on a quarterly basis as well as an annualized basis. This time, quarterly GDP was essentially flat.<\/p>\n

What’s next? <\/p>\n

Statistics Canada’s advance estimate for April points to a 0.4 per cent monthly rebound, driven by a recovery in mining, quarrying, and oil and gas.<\/p>\n

The Bank of Canada, which forecast 1.2 per cent growth for 2026, down from 1.7 per cent last year, will update its projections in July.<\/p>\n

Money markets are currently pricing in a 25 basis point rate hike in December, even as most economists expect no change in interest rates through the year, according to Reuters.<\/p>\n

The upcoming review of the North American free trade agreement and continued crude price volatility tied to the Middle East conflict<\/a> add further uncertainty to the outlook.<\/p>\n

Related: Billionaire hedge fund manager warns of global recession under one specific condition<\/a><\/strong><\/p>\n

This story was originally published by TheStreet<\/a> on May 29, 2026, where it first appeared in the Economy<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Canada has slipped into a technical recession for the first time since the pandemic, after Statistics Canada reported…\n","protected":false},"author":2,"featured_media":509697,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[174],"tags":[24653,79,995,192492,134532,179,18,19,17,6793,4475],"class_list":["post-509696","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bank-of-canada","tag-business","tag-canada","tag-consecutive-quarter","tag-consecutive-quarters","tag-economy","tag-eire","tag-ie","tag-ireland","tag-recession","tag-statistics-canada"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116661253796124053","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/509696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=509696"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/509696\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/509697"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=509696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=509696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=509696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}