Canada’s economy demonstrated signs of recovery as it expanded by 0.5% in April, reversing a trend of sluggish and negative growth in previous months. The increase in real gross domestic product was primarily driven by growth in the mining, quarrying, and oil and gas extraction sectors, according to the latest report from Statistics Canada released on Tuesday.
The mining, quarrying, and oil and gas extraction sector saw a significant 2.9% growth in April, the largest monthly increase since February 2024, which more than offset the previous month’s 1.4% contraction. Concerns about the Canadian economy had been raised following reports of GDP contractions in the first quarter of 2026 and the final quarter of 2025, leading to fears of a potential “technical recession.” Additionally, apprehensions over the impact of U.S. tariffs on Canadian goods added to economic uncertainties as the Canada-U.S.-Mexico Agreement review deadline approached.
Statistics Canada indicated a 3.7% rise in oil and gas extraction in April, the most substantial monthly increase since February 2024, with oil sands extraction leading the growth. The report highlighted that the industry expanded by 6.6% in April, driven by higher synthetic crude oil production compensating for lower crude bitumen extraction due to extended unscheduled maintenance in the previous months.
Apart from the natural resources sector, other industries also experienced growth, including manufacturing (0.6%) and the public sector (0.4%). The federal government public administration expanded for the first time in four months, while defense services recorded growth for the seventh consecutive month. Fourteen out of 20 industrial sectors reported growth in April, surpassing Statistics Canada’s earlier prediction of 0.4% growth.
Economists and analysts cautiously welcomed the positive growth figures as a departure from the economy’s previous sluggish performance. Nathan Janzen, Assistant Chief Economist at RBC, noted the encouraging rebound in economic activity in April after a period of stagnation. He emphasized the volatile nature of monthly data points and highlighted the positive impact of increased spending in accommodation and food services on household consumption amidst rising gasoline prices.
Although some experts expressed optimism about the economy’s resurgence in the second quarter, they remained cautious due to recent revisions in growth figures by Statistics Canada. The upcoming interest rate decision by the Bank of Canada on July 15 will be closely monitored in light of the evolving economic landscape.