Canada's Economy Expects Recovery After Weak Q1

Fitch Ratings expects Canada's economy to recover from a weak first quarter in 2026.

The technical recession was driven by weaker investment and a surge in imports, but more recent data suggests the downturn will not persist, with employment and wages rebounding in the second quarter.

Consumer spending, which rose 0.3 per cent quarter-on-quarter, was a relative bright spot in the first quarter.

The credit rating agency notes that Canadian consumers prioritised essentials over discretionary items due to elevated fuel prices, and this pattern is expected to continue.