Canadian economy grows 0.8% in second quarter, Newfoundland and Labrador sees slower wage growth

Canada's economy grew 0.8 per cent in the second quarter of 2026, led by stronger exports, household spending and business investment, according to new data from Statistics Canada.

The increase in real gross domestic product follows a revised 0.1 per cent gain in the first quarter, up from the previously reported flat reading.

On a per-capita basis, real GDP increases one per cent during the quarter as Canada's population declines for the third consecutive quarter.

Exports are a major contributor to the growth, rising 3.6 per cent — the fastest quarterly increase since the first quarter of 2023.

Passenger cars and light trucks account for a significant portion of the increase, with exports of those vehicles rising 27 per cent as Canadian auto production rebounds. Exports of intermediate metal products, energy products and industrial machinery and equipment also increase.

Residential investment also rebounds, rising 2.5 per cent after two consecutive quarterly declines. New construction increases 0.8 per cent, while resale-related ownership transfer costs see the largest gains in Ontario, Quebec and British Columbia.

Employee compensation rises 1.5 per cent nationally, with increases recorded in every province and territory.

Newfoundland and Labrador records the smallest increase among the provinces and territories at 0.5 per cent, compared with a high of 2.5 per cent in New Brunswick.

The household saving rate also rises to 3.7 per cent as disposable income grows 2.1 per cent, outpacing the 1.7 per cent increase in nominal household spending.

Statistics Canada says higher wages and salaries, along with increased government transfers, contribute to the rise in disposable income. The increase in transfers is mainly tied to a one-time GST/HST credit top-up payment made in June as part of the transition to the Canada Groceries and Essentials Benefit.