Canada's economy reverses months of slow growth with 0.5 per cent boost in April

Growth comes after two quarters of contraction and fears of a recession

Canada's economy showed signs of rebounding by growing 0.5 per cent in April, reversing months of slow and negative economic growth.

Real gross domestic product is up half a percentage point largely because of growth in the mining, quarrying and oil and gas extraction sectors, Statistics Canada said in its latest report, released Tuesday.

"The mining, quarrying and oil and gas extraction sector rose 2.9 per cent in April, the largest monthly growth rate since February 2024 (+3.2 per cent), more than offsetting March's 1.4 per cent contraction," the agency said in the report.

The report comes amid concerns about the state of Canada's economy, as Statistics Canada previously reported that GDP contracted in the first quarter of 2026 and the last quarter of 2025, prompting fears of a "technical recession." The effect of U.S. tariffs on Canadian goods has also been a source of economic anxiety, particularly as the Canada-U.S.-Mexico Agreement review deadline approaches on Wednesday.

Statistics Canada reported that oil and gas extraction rose 3.7 per cent in April — the largest monthly increase since February 2024. Oil sands extraction led the way.

Canada's GDP grew in April: StatsCan

"The industry expanded 6.6 per cent in April as lower crude bitumen extraction was more than offset by higher synthetic crude oil production, which rebounded following longer than anticipated unscheduled maintenance that tempered the growth through the first three months of the year," the report said.

The agency's early estimates have growth moderating but continuing with an increase of 0.1 per cent in May thanks to growth in finance, insurance, real estate and leasing.

Manufacturing, public sector also growing

Industries outside of natural resources also expanded, including the manufacturing sector (0.6 per cent) and the public sector (0.4 per cent). The report said federal government public administration grew for the first time in four months, while defence services grew for the seventh consecutive month.

Fourteen of 20 industrial sectors grew in April, according to the report.

April's GDP growth was slightly higher than the 0.4 per cent growth that Statistics Canada predicted in its previous report. Some economists and business leaders have recently criticized how the agency reports economic data, saying it's too prone to revisions of previous GDP reports. Tuesday's report did not mention any major revisions.

Analysts express cautious optimism about numbers

Analysts said the number marks a break from the economy's previous slow growth.

"Today's data show that the Canadian economy sprang back to life early in Q2, following the sluggishness seen in the previous two quarters," wrote Andrew Grantham, a senior economist with CIBC.

"We continue to forecast no change in the Bank of Canada's overnight rate this year."

Canada slipped into a technical recession on an annualized basis as economic growth stalled in 1st quarter

The central bank is set for its next interest rate decision on July 15.

Derek Holt, vice-president and head of capital markets economics at Scotiabank, said in a report that the economy "never entered any credible definition of recession, but growth is rebounding nicely in the second quarter. "

But Douglas Porter, chief economist at BMO Capital Markets, said it may be too early to celebrate, given how Statistics Canada has retroactively revised growth numbers recently.

"This helps wash away the bad taste of two small quarterly declines," he wrote. "Although after the big downward revisions by StatCan in the past quarterly release, we will curb our enthusiasm for now on this result."

Richard is a web writer with CBC News and an associate producer with CBC Radio. He's worked at CBC in London, Ont., Toronto, Windsor, Kitchener-Waterloo and Ottawa.

With files from Craig Lord of The Canadian Press