Canada’s economy posted a much stronger second quarter than many expected, growing at an annualized rate of 3.3 per cent as exports, business investment and residential construction all increased.
Statistics Canada reported that real gross domestic product accelerated sharply from the first quarter, which was revised upward to 0.3 per cent growth. The revision means Canada did not experience the two consecutive quarters of contraction commonly used as the rule of thumb for a technical recession.
June also finished on positive ground, with GDP increasing 0.3 per cent for the month.
Exports were one of the biggest contributors to the second-quarter expansion, rising 3.6 per cent, led largely by stronger automotive exports.
Investment also showed signs of improvement. Residential investment contributed to growth, while business capital investment rose 2.3 per cent as companies increased spending on machinery and equipment.
That increase ended five consecutive quarters of declining business investment, making it one of the more encouraging numbers in the report.
The results offer a considerably stronger picture of the Canadian economy through the end of June than the one suggested by the weak opening months of 2026.
They also arrive at an unusual moment.
The second quarter largely predates the latest deterioration in Canada-U.S. trade relations. Tariffs, retaliatory measures and renewed uncertainty surrounding access to the American market could affect investment, exports and economic growth during the second half of the year.
One strong quarter doesn’t erase Canada’s longer-term problems with productivity, affordability, investment and per-capita economic growth. It does, however, make claims that Canada entered the summer in recession considerably harder to sustain.
The economy grew. Business investment finally increased. Exports strengthened.
The next question is whether Canada can keep it going as the economic environment around it becomes much less predictable.
Source: Statistics Canada data reported by CBC News