Gross domestic product, income and expenditure, first quarter 2026
Released: 2026-05-29
Real gross domestic product (GDP) was unchanged in the first quarter of 2026, after declining 0.2% in the fourth quarter of 2025. Higher imports of goods, particularly gold, were offset by accumulations of business inventories. Decreased business and government capital investment was counterbalanced by higher household spending, as final domestic demand edged 0.1% lower.
On a per capita basis, real GDP increased 0.2% in the first quarter of 2026, as the population declined for a second consecutive quarter and GDP remained unchanged.
Chart 1
Real gross domestic product and final domestic demand
Chart 2
Contributions to percentage change in real gross domestic product, first quarter of 2026
Rise in imports drags gross domestic product growth
Imports rose 2.9% in the first quarter of 2026, with roughly half of the rise coming from intermediate metal products and waste and scrap metal, both of which were driven by gold imports. Excluding these two categories, imports rose at less than half the pace (+1.2%), led by higher purchases of passenger cars and light trucks and industrial machinery and equipment. In contrast, imports of pharmaceuticals and medicinal products declined in the first quarter, as did travel imports, as fewer Canadians travelled abroad.
Exports edged down 0.1% in the first quarter of 2026, after rising 1.6% in the fourth quarter of 2025. The decline in the first quarter was led by fewer exports of passenger cars and light trucks, which have been impacted by US tariffs. Offsetting most of this decline was an increase in shipments of crude oil and crude bitumen, as well as natural gas.
Chart 3
Volumes of exports and imports
Accumulation of business inventories offsets higher imports of goods
Business inventories built up in the first quarter of 2026, as higher imports of gold fuelled the net acquisition of this precious metal. The manufacturing sector added to inventories in the first quarter after posting significant withdrawals in the fourth quarter. Meanwhile, the retail and wholesale trade sectors recorded inventory drawdowns in the first quarter.
Lower business investment in engineering structures more than offsets increased spending on other capital assets
Business capital investment fell 0.7% in the first quarter of 2026, the fifth consecutive quarterly decline. A 4.6% decline in engineering structures was moderated by increased spending on machinery and equipment (+2.5%), mineral exploration and evaluation (+27.9%), non-residential buildings (+2.1%) and software (+1.9%).
Investment in residential structures falls on weak resale activity
Business investment in residential structures fell 2.0% in the first quarter of 2026, following a 2.4% decrease in the fourth quarter of 2025. The first quarter decline was led by continued weakness in resale housing activity (termed "ownership transfer costs"), which fell 9.9% in the first quarter of 2026 after falling 3.4% in 2025 overall. In the first quarter of 2026, new residential construction edged down 0.1%, led by decreased absorptions (the indicator for sales) of completed units, while work-put-in place for row homes and apartments increased.
Chart 4
Change in total and per capita real household final consumption expenditures
Government investment in weapons systems slows
Government capital investment fell 2.5% in the first quarter of 2026, following notable strength throughout most of 2025. The first quarter decline was primarily due to lower investment in weapons systems compared with the high level of investment at the end of 2025. Despite the decrease, government investment in weapons systems in the first quarter of 2026 ($8.3 billion, seasonally adjusted at annual rates) remained well above the average quarterly investment recorded since 1981 ($1.7 billion, seasonally adjusted at annual rates).
Household spending up on financial services and food
Household spending rose 0.4% in the first quarter of 2026, following a 0.7% increase in the fourth quarter of 2025. Growth in the first quarter was led by higher spending on financial services and food. Meanwhile, fewer Canadians travelling abroad as well as decreased purchases of new vehicles tempered the overall growth in household consumption expenditures.
Chart 5
Housing investment
Higher export prices push up gross domestic product deflator
The GDP deflator rose 1.1% in the first quarter of 2026, led by export prices, which increased 3.4% following the global rise in oil prices. Import prices rose 1.1%, resulting in the terms of trade—the difference between the price of exported goods and services and the price of imported goods and services—increasing 2.3%. The deflator for household final consumption expenditure rose 0.6% in the first quarter; however, excluding food and energy prices, it edged up 0.2%.
Chart 6
Gross domestic product price indexes, selected components
Compensation of employees rises
Compensation of employees increased 1.2% in the first quarter of 2026, led by professional and personal services (+2.0%), health care and social assistance (+1.7%) and retail and wholesale trade (+1.6%). These increases were moderated by declines in federal government public administration (-3.3%) and finance, real estate and company management (-1.2%).
Compensation of employees grew in all provinces and territories in the first quarter of 2026, ranging from 0.7% in Quebec to 3.0% in Yukon.
Map 1
Compensation of employees, quarter-to-quarter % change, seasonally adjusted data
Corporate income growth fuelled by strength in energy prices
Corporate incomes increased 1.6% in the first quarter of 2026, the third consecutive quarter of growth. The energy sector led the gains in non-financial surplus, as global energy prices rose significantly in the quarter. Operating surplus for the mining sector was also up in the first quarter, continuing a string of increases since the start of 2025, while incomes for the services industries were generally flat. Gross operating surplus of financial corporations rose 6.1% in the first quarter of 2026, led by increased output of investment services and associated fee income.
Household saving rate dips to its lowest in two years
The household saving rate slowed to 3.5% in the first quarter of 2026, the lowest rate since the first quarter of 2024, as disposable income increased 0.6%, while nominal consumption expenditure rose 0.9%. Although compensation of employees increased in the first quarter of 2026, declines among other income sources weighed on disposable income, including self-employment income (termed net mixed income), net investment income (termed net property income) and net receipts of current transfer.
Net property income declined 0.6% in the first quarter of 2026 due to a combination of reduced investment earnings and higher interest payments. Household investment earnings (i.e., property income received) declined 0.1% in the first quarter, due mainly to lower returns on interest-bearing instruments. Household property income paid, comprised of mortgage and non-mortgage interest expenses, increased by 0.7%, marking the first increase since the second quarter of 2024. The Bank of Canada policy rate was unchanged during the first quarter of 2026, in contrast with its numerous reductions over the past two years.
Reconciling gross domestic product by income and expenditure to provide a clear picture of Canada's economy
Each quarter, a wide range of data sources are brought together to measure Canada's economy from two main perspectives: income and expenditure.
Income-based gross domestic product (GDP) tracks money earned through production. This includes:
• Wages and salaries paid to workers
• Income earned by self-employed individuals
• Operating surplus generated by corporations
• Taxes collected by governments on products and production, less any subsidies
Expenditure-based GDP focuses on how money is spent in the economy. This includes:
• Household spending on goods and services
• Government spending
• Business investment, such as in machinery, buildings and inventories
• Net trade, calculated as exports minus imports
In theory, these two approaches should give the same result. The total income earned from producing goods and services should equal the total expenditure on those goods and services.
Why differences occur
In practice, the two measures do not always match perfectly. This is because they rely on different data sources, which can vary in concepts, coverage, timing and accuracy.
To address these differences, national accountants carry out a detailed reconciliation process. This means carefully comparing related pieces of information from both perspectives to ensure they align.
How reconciliation works
National accounting experts look for logical links between income and spending data. For example:
• Profits in certain industries are closely tied to exports of their goods or services
• Investment in machinery and equipment often corresponds to imports, such as computers or other technology
• Investment in construction projects is closely linked to labour market conditions—particularly wage trends—as well as sales of key building materials
If these related figures do not align, it signals a potential inconsistency. When this happens, adjustments may be made so that the data tell a coherent and accurate story about the economy.
These adjustments are based on both:
• Quantitative analysis (examining the numbers closely) and
• Qualitative assessment (considering the quality and reliability of data sources)
Data quality
The quality of all data sources improves over time and are integrated in accordance with pre-established revision cycle which may introduce changes to previous adjustments. The confrontation of data sources is conducted for every quarter within the open period.
By combining multiple data sources and carefully resolving discrepancies in the coherence of different data sources, Canada's national accounts provide a consistent and trustworthy picture of the economy. This helps governments, businesses and Canadians make informed decisions.
Sustainable development goals
On January 1, 2016, the world officially began implementing the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the following 15 years. The plan is based on 17 specific sustainable development goals.
Data on gross domestic product, income and expenditure are an example of how Statistics Canada supports the reporting on global sustainable development goals. This release will be used to measure the following goals:
Note to readers
Revisions
This release of gross domestic product, income and expenditure for the first quarter of 2026 includes revised estimates for the first quarter of 2025 to the fourth quarter of 2025. These estimates incorporate new and revised data, as well as updated information on seasonal trends.
Percentage changes for expenditure-based statistics (such as household spending, investment and exports) are calculated from volume measures that are adjusted for price variations. Percentage changes for income-based statistics (such as compensation of employees and operating surplus) are calculated from nominal values; that is, they are not adjusted for price variations. Unless otherwise stated, growth rates represent the percentage change in the series from one quarter to the next: for instance, from the second quarter of 2025 to the third quarter of 2025. Unless otherwise stated, quoted values represent seasonally adjusted amounts at annual rates.
For information on seasonal adjustment, see Seasonal adjustment: Concepts and interpretation, 2026.
Real-time tables
Real-time tables 36-10-0430-01 and 36-10-0431-01 will be updated on June 8.
Next release
Data on GDP by income and expenditure for the second quarter of 2026 will be released on August 28.
Products
The data visualization product "Gross domestic product by income and expenditure: Interactive tool," which is part of the Statistics Canada – Data Visualization Products series (71-607-X), is now available.
The document "Revisions to Canada's GDP," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is available.
The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structure.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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