Canada Economy Surpasses Expectations with 0.3% Growth in May

Canada's economy experienced a modest growth of 0.3% in May, exceeding market expectations of 0.2%. The mining, quarrying, and oil and gas sector led the charge with a notable expansion of 1.0%, driven by higher oil sands extraction.

The data from Statistics Canada also revised April's growth up to 0.6%, marking the highest month-on-month gain since July 2025. Goods-producing industries as a whole expanded 0.6% in May, while services-producing industries posted a more subdued 0.2% gain.

Looking ahead, Statscan issued a flash estimate suggesting June's GDP may have increased by 0.2%, which translates to an annualized second-quarter growth of 3.4%. This is significantly higher than the Bank of Canada's July 15 forecast of 2.5%, and marks the highest annualized quarterly increase since the first three months of 2023.

The central bank has maintained its benchmark overnight rate at 2.25% since July 15, citing expectations that growth will strengthen in the second half of the year as inflation pressures ease and firms adapt to US tariffs.