Canada’s economy showed mixed signals in the first quarter of 2026, with real gross domestic product (GDP) remaining flat.
Statistics Canada said GDP was unchanged after a 0.2 per cent decline at the end of 2025, leaving overall growth stalled.
Higher imports weighed on the quarter. Imports rose 2.9 per cent, driven by a surge in gold shipments and higher purchases of passenger vehicles and industrial machinery.
Imports of pharmaceuticals and travel services fell as fewer Canadians travelled abroad.
Exports edged down 0.1 per cent as shipments of passenger cars and light trucks dropped because of U.S. tariffs, while crude oil, crude bitumen and natural gas exports increased.
Business inventories rose in the quarter, led by gold acquisitions and a rebound in manufacturing inventories after large withdrawals late last year.
Retail and wholesale inventories declined, StatsCan reported.
Investment falls again as households spend more
Business capital investment fell 0.7 per cent, marking the fifth straight quarterly drop.
Statistics Canada said a 4.6 per cent decline in engineering structures outweighed higher spending on machinery and equipment, mineral exploration, non‑residential buildings and software.
Residential investment fell two per cent, led by a 9.9 per cent drop in ownership transfer costs tied to weak resale activity.
Government capital spending decreased 2.5 per cent.
The agency said the decline was mainly due to lower investment in weapons systems compared with the high levels recorded at the end of 2025, but spending remained well above long‑term averages.
Household spending rose 0.4 per cent, led by higher spending on financial services and food.
Statistics Canada said fewer Canadians are travelling abroad and lower purchases of new vehicles held back overall growth in consumption.
Prices, wages and incomes move higher
The GDP deflator increased 1.1 per cent, driven by a 3.4 per cent rise in export prices following global increases in oil prices.
Import prices also rose 1.1 per cent, improving Canada’s terms of trade.
Compensation of employees increased 1.2 per cent, with the largest gains in professional and personal services, health care and social assistance, and retail and wholesale trade.
All provinces and territories saw increases, ranging from 0.7 per cent in Quebec to three per cent in Yukon.
Corporate incomes rose 1.6 per cent, supported by higher global energy prices.
The mining sector continued to post gains, while incomes in services industries were mostly flat, according to StatsCan.
Operating surplus for financial corporations rose 6.1 per cent.
The household saving rate fell to 3.5 per cent, the lowest since early 2024.
Statistics Canada said disposable income rose 0.6 per cent but was held back by declines in self‑employment income, investment income and transfer receipts.
Mortgage and non‑mortgage interest payments increased 0.7 per cent, marking the first rise since mid‑2024.
The Bank of Canada’s policy rate was unchanged through the quarter.
