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Canada is in a technical recession after economic growth stalled in the first quarter, following a further decline in the previous quarter.

Statistics Canada reported that real gross domestic product (GDP) fell 0.1% on an annualized basis in the first three months of 2026. This follows a downwardly revised contraction of 1% in the fourth quarter of 2025, marking two consecutive quarterly declines on an annualized basis.

While GDP was unchanged quarterly in the first quarter—narrowly avoiding the formal definition of a technical recession on that measure—the back-to-back annualized contractions point to a broader economic slowdown.

The discussion around the figures focused on Canada’s trade direction and industrial strategy, with concern that the country is shifting away from its strongest economic relationship with the United States while increasing emphasis on Europe and China, even as those markets also struggle economically.

Calls were made to reduce regulatory barriers and expand the domestic industry, particularly in natural resources, which were identified as a key driver of Canada’s export economy.

Attention also centred on Canada’s role as a major supplier of energy and critical minerals to the United States, described as a mutually beneficial trade relationship.

This points to serious concerns that the Liberal policy choices are not delivering sufficient growth, with economic output flatlining and annualized contractions continuing across two quarters.