Canada economy grows 3% in Q2, fastest since 2023

Canada’s economy posted its strongest quarterly performance in over three years during Q2 2026, with annualized real GDP growth coming in at approximately 3.4%. That’s well above the Bank of Canada’s July forecast of 2.5% and a sharp reversal from the flat 0.0% reading in Q1 and the outright 0.2% contraction in Q4 2025. What drove the rebound Oil and gas extraction led the charge on the supply side. Net trade also staged a comeback, particularly in the automotive sector. Consumer spending and business investment rounded out the picture. Monthly data from Statistics Canada tells a tidy story of momentum building and then gently cooling. April saw a robust 0.6% month-over-month expansion (revised upward from earlier estimates), followed by 0.3% growth in May and a flash estimate of 0.2% for June. Context: what Canada was recovering from US tariffs imposed on certain Canadian exports disrupted trade flows, potentially affecting around 5% of the country’s total exports. Simultaneously, a slowdown in immigration reduced population growth, which dragged on labor supply and made per-capita economic metrics look even worse than the headline figures. The last time Canada saw quarterly growt...