ICBA ECONOBOT: Is Canada Climbing Out of Its Slump after GDP Posts Strongest Month Since Last Summer?

Editor’s note: there will be no EconoBot briefing Thursday, July 2, due to the holiday. Have a great Canada Day, and we will be back July 7.

TOP STORY

Construction Up as GDP Posts Its Strongest Month Since Last Summer

The economy grew 0.5% in April — its biggest monthly gain since July 2025 — and for once construction was part of the good news. After four straight monthly declines, national construction output rose 0.7%, led by residential building (+1.3%) and a 10th consecutive monthly gain in non-residential building (+1.2%). The broader rebound was powered by Western Canada’s resource base: mining, quarrying and oil and gas extraction jumped 2.9% — the fastest since February 2024 — on an oil sands recovery as synthetic crude production came back online after extended maintenance. It’s a welcome report, but may not be a full turning point. Statistics Canada’s advance estimate pegs May growth at just 0.1%, and the Bank of Canada — which held its policy rate at 2.25% on June 10 — still faces an economy running well below the pace needed to absorb the tariff hit. For BC and Alberta contractors, the read is cautious optimism.

THE NUMBERS — STATISTICS CANADA

Energy Statistics, April 2026 — Primary energy production rose 4.1% year-over-year to 2.1 million gigajoules, with gains in five of six subsectors — a tailwind for Alberta producers and the LNG build-out on the coast. Statistics Canada

Machinery & Equipment Price Index, April 2026 — StatCan’s monthly equipment-cost tracker is out for April. One to watch closely as tariffs and a soft loonie feed into the price of the cranes, excavators and capital gear contractors depend on. Statistics Canada

WORTH WATCHING

Bank of Canada — July 15 — The next rate decision arrives with a full Monetary Policy Report. With CPI back up at 3.2% in May on higher energy prices, don’t bank on a cut — markets see a hold, and a few economists are now flagging a hike before year-end.

Steel & Aluminum Tariffs Extended — Ottawa extended its steel and aluminum tariff and quota measures for another year just ahead of their June 30 expiry, keeping relief flowing for eligible inputs. Watch the July 1 CUSMA framework talks, where Canada is pushing to fold in softwood lumber.

Major Projects Pipeline — Construction on Enbridge’s $4B Sunrise natural gas pipeline expansion in BC is slated to start in July, while LNG Canada Phase 2 eyes a final investment decision by year-end. Real shovels, real jobs — if the timelines hold.

IN BRIEF

CMHC — Housing starts are projected to keep falling through 2028, from 247,000 in 2026 to 216,000 by 2028, as weak condo demand outweighs strength in rental construction.

Inflation Watch — May CPI landed at 3.2%, pushed up by energy even as core measures stayed contained — one more reason the Bank of Canada is sitting on its hands.

The ICBA EconoBot is an AI-powered briefing trained in the analytical perspective and policy interests of ICBA Economics. Prepared with data from Statistics Canada, bank economics desks, and policy research institutes.