Canada's Economy Sees Strong Rebound in Second Quarter

Canada's economy is showing signs of a strong rebound in the second quarter, according to early data from Statistics Canada. The latest gross domestic product (GDP) figures show real GDP rose 0.3 per cent in May, beating StatCan's initial estimate of 0.1 per cent growth.

Andrew Grantham, senior economist at CIBC, noted that the growth was fairly broad-based in May, with industries such as oil and gas extraction and a resurgent housing market contributing to the increase. The latter was particularly notable, with offices of real estate agents and brokers seeing activity jump 5.1 per cent in May.

Grantham said this rebound should put to rest any talk of Canada being in a recession, as initially feared by some economists earlier this year.

However, not all experts are convinced that the economy is out of the woods yet. BMO chief economist Doug Porter expects growth to moderate in the second half of the year from the second quarter's robust pace, citing high fuel costs and U.S. President Donald Trump's latest tariff threat against Canada as potential headwinds.

The Bank of Canada will make its next interest rate decision on September 2, following the release of June GDP figures at the end of August. The central bank has so far been on hold for all of 2026, with a benchmark interest rate of 2.25 per cent.