Your Bottom Line #2 - Canada is now in a technical recession

1 - Canada’s in a technical recession - but it’s not all doom and gloom

Canada’s economy is now officially defined as in a technical recession, as the latest Gross Domestic Product (GDP) numbers show growth came in lower than expected in the first quarter of 2026, marking two consecutive quarters of decline.

According to Statistics Canada, the annualized rate of growth came in at a decrease of 0.1% for the first three months of the year. That follows the 1% decline that was recorded between October and December 2025. 

In March specifically, GDP dipped by 0.1% – which partially offset the slight 0.2% uptick in February – as goods-producing industries declined for the fifth time, as well as a dip in the construction, mining, and oil and gas sectors.

The data is a stark contrast to economist expectations that the economy had grown by 1.5% in the first three months of the year. The StatCan report says that while there were some pockets of positivity – including higher imports of goods and household spending – businesses have been building up their inventories and spending less. A decrease in government capital spending also contributed to the decline.

But while the headline sounds dire, the GDP results are a mixed bag. The same report finds that the per-capita measure – which reflects how economic conditions are actually impacting the standard of living for individuals – actually rose by 0.2%, though this was largely due to the decline in population.

The newly-minted technical recession label may also be short-lived. StatCan is anticipating that GDP will tick back up by 0.4% in April, as the oil and gas sector bounces back.

So, how does this play out for everyday Canadians? While not as deeply felt as a formal, wide-spread recession, being in a technical downturn will likely spell increased financial insecurity, and a shakier job market, as businesses will be less likely to invest and hire. 

And Canadians are already feeling less-than-optimistic about where conditions are trending; survey results compiled by Ratehub.ca this week find that 54% or respondents expect the economy to perform worse in 2026 while their cost of living rises; 68% expect it’ll be tougher to make ends meet, while only 29% anticipate an increase in their take-home income.

One potential silver lining – today’s GDP report could result in slightly lower fixed mortgage rates. The Government of Canada bond yield – which underpins lender pricing for five-year fixed mortgage rates – slipped back down to the 3.0% range upon the GDP news, after weeks of hovering near the 3.3% mark. If they continue to slide, it’s possible lenders could respond with rate decreases. There hasn’t been any movement yet – the lowest five-year fixed mortgage rate in Canada remains 4.09% – but we can always hope.

2 - Bank of Canada says mortgage renewal risk to pass by 2027

There’s been no shortage of economic volatility in 2026, and that has certainly kept the Bank of Canada on its toes; tariffs, war in the Middle East – and surging inflation threats as a result of both – have muddied the outlook for our central bank, which has responded by holding firm on its benchmark rate… for now.

However, a recent check in from the BoC shows our economy has weathered these headwinds better than initially expected – and that some of the toughest factors facing borrowers will soon pass. The Bank’s Financial Systems Report, released on May 28, shows that despite Canada’s now-uneasy trade relationship with the United States, and global uncertainties due to war in the Middle East, Canadian markets have continued to function well.

Another interesting tidbit in the Bank’s tome revealed that the once-dreaded “mortgage renewal wave” – the onslaught of borrowers coming up to renew their five-year terms at rates much higher than what they originally got in 2021 – has been milder than anticipated. The Bank also expects that the final chunk of these borrowers will deal with their renewal over the next year, with the risk fully gone by 2027.

“Over the past 12 months, borrowers who took out a mortgage at very low interest rates during the pandemic have been renewing at higher rates. Many mortgage holders faced higher payments at renewal in 2025 and in the first half of 2026, but most have been able to manage the increase,” states the FSR report. “As a result, lenders have not seen a broad rise in loan losses.”

The Bank adds that the mortgage stress test, which tacks an extra 2% onto the rate a borrower actually gets from their bank, was a big help in alleviating the shock; because of it, 90% of borrowers who renewed over the last 12 months got a rate lower than what they actually qualified at. Others turned to methods to lessen the increase of higher payments, such as extending their overall amortization period.

3 - Bruno Mars took Toronto by storm – literally

There’s nothing “Romantic” about a last-minute cancellation – but that’s what thousands of would-be concert goers got when inclement weather forced the postponement of Bruno Mars’ concert in Toronto on Saturday, May 23.

While ticketholders for that day have had their show rescheduled to May 31st – and Mars has since dazzled audiences since with three of shows on schedule – it raises the question: What happens if you’ve travelled and paid for accommodation for a concert, and it’s cancelled? How can you recoup costs for money spent on airfare, hotels, and other accommodations?

This is where insurance can come in clutch – but the type of coverage you have, and whether you’re already at your destination, matters. 

For the most part, if you’ve already taken a flight and are staying at your hotel, trip cancellation benefits can’t be used to cover those costs – you’re already there, and your travel providers don’t care about the reasons for your booking. 

If you haven’t yet taken flight, though, and you’ve upgraded to a “Cancel For Any Reason” (CFAR) policy, you may be able to claw back a good trip costs that would otherwise be non-refundable. Without that policy, though – and depending on the airline’s flexibility – a last-minute cancellation may be possible in lieu of a travel credit.

There is also the option of taking out Event Ticket insurance. This is a feature offered through Ticketmaster that can be added on when checking out with your tickets. Offered by Allianz, this coverage can cover full costs up to $1,000 per ticket should a promoter cancel (assuming the venue doesn’t automatically reschedule or offer a refund). However, the coverage isn’t always in force in cases such as natural disasters, or other unforeseen events such as war. 

The takeaway? If you’re planning on travelling to see your favourite artist, Cha Cha Cha over to the fine print on your tickets and bookings to see what flexibility is offered – and check out your travel insurance options (including credit cards with built-in coverage!) for additional peace of mind.

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