Canada’s real gross domestic product unexpectedly contracted slightly in the first quarter of 2026, marking the second consecutive quarterly decline and meeting the technical definition of a recession.

The results came as a surprise: Preliminary estimates in April had suggested the economy grew to start the year, but data released Friday by Statistics Canada showed an increase in imports — up 2.9 per cent in the first quarter, mainly driven by gold imports — dragged real GDP growth into negative territory on an annualized basis.

StatCan officials did not comment on whether the economy is experiencing a recession, defined as two consecutive quarters of negative growth.

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This is the first time the Canadian economy experienced two consecutive quarters of negative growth since 2020, when the economy contracted in the first two quarters.

Exports edged down 0.1 per cent to start the year after rising in the fourth quarter of 2025 due to a decrease in shipments of passenger cars and light trucks.

Goods-producing industries also edged down 0.4 per cent quarter-to-quarter, while service-producing industries grew by 0.3 per cent during the same time period.

On the expenditures side, a decrease in business and government capital investments were counterbalanced by higher consumer spending, and StatCan said final domestic demand edged 0.1 per cent lower.

Real GDP in March edged down by 0.1 per cent, offsetting the growth seen in February, primarily due to contractions in goods-driven industries.