Canada: Economic growth accelerates in the second quarter of 2026
GDP reading: Canada’s GDP expanded 3.3% in seasonally adjusted quarter-on-quarter annualized (SAAR) terms in Q2, following 0.3% growth in the prior quarter. Q2’s reading was the strongest since Q1 2023.
Broad-based improvement: Relative to the prior period’s data, figures in Q2 improved for private consumption (+3.3% in seasonally adjusted quarter-on-quarter annualized (SAAR) terms vs +2.4% in Q1), government consumption (+3.9% vs -0.1% in Q1), fixed investment (+5.3% vs -6.0% in Q1) and exports of goods and services (+15.1% vs +1.3% in Q1). In contrast, the reading for imports of goods and services softened in Q2 (+1.1% vs +13.1% in Q1).
Panelist insight: On the data and outlook, Desjardins’ Randall Bartlett said:
“The increase in real GDP in Q2 2026 was led by a rebound in exports, which posted the largest quarterly advance since Q1 2023. Real investment also moved higher in Q2. Not to be outdone, real household spending gained ground for the third consecutive quarter. Real GDP per capita has now regained most of the ground lost since 2022. While the strong advance in Q2 real GDP is unambiguously good news, it’s important to not give it too much importance. All this data came before the recent escalation in trade tensions between the US and Canada. This is the downside risk to inflation that the Bank of Canada had been emphasizing.”