Canada GDP Rises 3.4% Annualized in Second Quarter

Canada's economy grew by 0.3% in May 2026, marking a second consecutive month of expansion and exceeding the initial 0.1% estimate from Statistics Canada. The growth was broad-based, with 13 of 20 industrial sectors contributing. Gains were led by a 1% increase in mining, quarrying, oil and gas extraction—supported by deferred maintenance and pipeline shipments—as well as a 5.1% jump in real estate agent and broker activity.

Combined with a revised April growth rate of 0.6% and a projected 0.2% gain for June, the economy is on track for an annualized GDP increase of 3.4% for the second quarter. This represents a significant recovery from a 0.1% annualized contraction in the first quarter and surpasses the Bank of Canada's 2.5% forecast.

Economists from TD Bank and BMO suggest the first-quarter dip was the result of temporary volatility rather than systemic weakness. However, analysts warn that growth may moderate in the second half of the year due to high fuel costs and tariff threats from U.S. President Donald Trump. The Bank of Canada has maintained its benchmark interest rate at 2.25% throughout 2026, with its next rate decision scheduled for September 2.