Canada's Economy Poised for Recovery Despite Weak Q1

Fitch Ratings has expressed optimism about Canada's economic recovery after a weak start to 2026. The agency expects the economy to rebound, driven by improving jobs and wages.

According to Fitch, consumer spending was a relative bright spot in the first quarter of 2026, rising 0.3 per cent quarter-on-quarter (QoQ). However, trade uncertainty and elevated fuel costs remain concerns for retail and apparel businesses exposed to Canadian consumer demand.

The agency warns that the Section 338 tariffs imposed on certain Canadian goods could complicate future negotiations and add to the tariff burden. Additionally, higher fuel prices are a concern, both directly through pump prices and indirectly through supply chains.