Canada’s GDP Surprised to the Upside… But Is a Recession Still Coming?

Jun 1

Canada’s economy just beat expectations, thanks to U.S. companies rushing to buy Canadian goods ahead of Trump’s new tariffs.

But even with stronger GDP, signs of a recession are still showing up.

Canada’s GDP grew 2.2% in Q1 (stronger than the 1.7% economists predicted).

That pushed the Canadian dollar to its 4th straight monthly gain, the longest streak since 2021.

Here’s what’s really going on in the Canadian economy:

- Domestic demand didn’t grow at all (the first time since 2023)… That means Canadians weren’t spending or investing more inside the country.

- Household spending stayed low, showing people were holding back on purchases.

- Imports rose, not because consumers were buying more, but because businesses were stockpiling goods ahead of more tariff drama.

So while GDP rose, the growth came from outside demand, not strength at home.

- U.S. companies rushed to stock up on Canadian goods before Trump’s tariffs, boosting exports

- Mining, oil & gas, and construction rebounded in March after slumping in February

- Machinery & Auto Parts manufacturing stayed strong

- Finance & insurance rose as investors moved money due to trade and interest rate changes

Canada’s economy isn’t crashing, but it’s not fully thriving either.

- March GDP: +0.1%

- Annual GDP: 2.2%

- Inflation: 1.7%

- Unemployment: 6.9%

If you're investing, budgeting, or just trying to stay ahead, now’s a good time to pay attention.

Femi Orenuga

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