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Canada's economy contracted in the first quarter on an annualized basis by a slim margin, marking the second consecutive quarter of such decline — which some would call a technical recession.
Statistics Canada said real gross domestic product fell 0.1 per cent on an annualized basis in the first three months of this year. That comes after a downwardly revised contraction of one per cent in the fourth quarter of 2025.
Two consecutive quarters of contraction in economic growth is termed a technical recession.
However, on a quarterly basis, the first quarter GDP was unchanged against a decline in the fourth quarter of last year, closely escaping the definition of a technical recession on a quarter-on-quarter basis.
The annualized GDP figure scales up the quarterly figure to show what the GDP would be if the economy kept the same pace for the whole year, whereas the quarterly figure looks at the sheer number.
The last time Canada was in a technical recession was during the start of the pandemic in 2020. Before that, it was during the oil shock at the beginning of 2015.
At that time, there were two consecutive quarters of decline both on an annualized basis and quarterly basis, Statistics Canada said.
Given the difference between the annualized and non-annualized figures, BMO chief economist Douglas Porter said whether the technical recession label fits will be a matter of debate.
He points out that the dip in the first quarter is very small, meaning it could be "easily revised away."
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