Statistics Canada (StatsCan) reported that Canada’s gross domestic product expanded at a relatively strong pace in April after contracting in March. April’s strong growth suggests Canada’s economy had a positive start to the second quarter of 2026, which may have the economy expanding after slumping in the previous two quarters. Canada’s economy faces several risks, including trade disruption and higher energy prices, which are negatively impacting consumers. In April, however, higher oil prices helped the energy industry, which positively contributed to economic growth during the month.

• Canada’s economy expanded by 0.5% in April over the previous month, rebounding from a 0.1% decline in March. This marked the strongest pace of monthly growth since January 2023.
• The increase was driven by the oil and gas extraction industry. Oil production spiked, boosted by higher demand for Canadian oil amid the conflict in the Middle East, which has stunted the global supply of oil.
• The energy sector also benefited from higher oil prices during the month.
• Canada’s economy also benefited from strong real estate activity. Resale activity picked up at the beginning of the spring season.
• Looking ahead, StatsCan estimates that Canada’s economy expanded by 0.1% in May. Should there be no significant downturn in June, Canada’s economy is on pace to expand over the second quarter.

The data suggests Canada’s economy may not be headed towards a prolonged slump, as some market participants had feared. Canada’s economy continues to face several risks, including trade uncertainty with the US and elevated inflationary pressures. However, oil prices have come down since the early stages of the Mideast conflict, which could alleviate some pressure on consumers and businesses.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.