Canada’s economic output contracted slightly in the first quarter of 2026, with year-over-year GDP slipping to -0.05%, according to data last updated on 29 May 2026. This marks a reversal from the fourth quarter of 2025, when GDP grew 0.72% compared to the same period a year earlier.
The shift from modest positive growth to a marginal decline suggests that Canada’s economy has lost momentum entering 2026. The data compare each quarter’s performance against the corresponding quarter a year before, indicating that the overall level of activity in Q1 2026 was fractionally lower than in Q1 2025, after having still been higher in Q4 2025 versus Q4 2024.
While the scale of the contraction is small, the move into negative territory on a year-over-year basis may heighten concerns about the durability of Canada’s growth trajectory and could factor into expectations for fiscal and monetary policy in the coming quarters.
