Canada’s economy expanded 0.5% in April, topping analyst forecasts of 0.4% and ending a stretch of contraction that had stoked recession fears, Statistics Canada reported Tuesday.
A surge in oil sands activity did most of the heavy lifting. Mining, quarrying, and oil and gas extraction posted a 2.9% monthly gain, the sector’s best result since February 2024.
Within that group, oil and gas extraction climbed 3.7%, powered by a rebound in synthetic crude oil production at the oil sands after longer-than-expected unscheduled maintenance had held back output for the first three months of the year. Oil sands extraction itself rose 6.6% on the month.
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The April reading takes on added significance given the backdrop. Two consecutive quarters of contraction, covering the final quarter of 2025 and the first quarter of 2026, met the common threshold for a technical recession, making the April bounce a meaningful early signal for the second quarter.
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Growth was not confined to the resource sector. Manufacturing posted a 0.6% gain, while federal government public administration recorded its first increase in four months and defence services extended a run of expansion to seven consecutive months. A 0.4% rise in public sector output rounded out the picture, with 14 of 20 industrial sectors finishing the month in positive territory.
Looking ahead, Statistics Canada’s preliminary estimate shows growth moderating to 0.1% in May, with finance, insurance, real estate, and leasing providing the main support.
The April report lands just as the CUSMA review deadline arrives Wednesday, with the ongoing uncertainty around U.S. tariffs continuing to cloud the broader economic outlook.
