Canada's economy has proven resilient through early 2026—bending, not collapsing despite significant headwinds.
A second consecutive gross domestic product decline in Q1 sparked recession concerns, but the underlying data tells a more encouraging story: Per-capita growth shows Canada is in an early-stage recovery rather than a contraction.
To be clear, the economy is not strong yet. Unemployment is still too high. Population declines will continue to limit the underlying growth rate that can be generated. Sectors directly targeted by U.S. tariffs continue to underperform, and high fuel costs are cutting into household purchasing power.
But, headline growth numbers mask an important shift: Slowing population growth is depressing aggregate GDP while measures that reflect how households experience the economy show signs of improvement. We remain cautiously optimistic that enough support remains in place to sustain gradual improvement in those per-person and per-worker economic indicators this year with further tailwinds building into 2027.
Read the full piece — "The economy is bruised, not broken"