Quebec’s real GDP rose by 0.3 per cent in the first quarter

The Montreal Canadiens playoff run and the F1 change of date helped Quebec's economy rebound slightly in Q3. (Christopher Katsarov/The Canadian Press)

Quebec’s non-annualized real gross domestic product (GDP) rose by 0.3 per cent in the first three months of 2026 compared with the previous quarter, during which it had fallen by 0.1 per cent.

According to the Quebec Statistics Institute, growth in the first quarter was largely attributable to an increase in investment in inventories.

Investment in inventories shifted from a drawdown of $4 billion in the fourth quarter of 2025 to an increase of $1.3 billion in the first quarter of 2026.

This increase is mainly due to a rise in gold stocks and an increase in manufacturing stocks, according to the institutes.

“Unlike Canada, which experienced a second consecutive quarterly contraction in its GDP – albeit a very modest one – in the first quarter of 2026, the Quebec economy rebounded by 1.3 per cent on an annualized basis at the start of the year, following a 0.3 per cent contraction in Q4 2025, thereby dispelling any potential debate about a technical recession,” said Daren King, senior economist at National Bank Capital Markets, in a note.

He did, however, suggest that some signs of weakness lie behind this growth.

“In fact, final domestic demand, which excludes the effects of international trade and inventories, actually contracted by 1.3 per cent over the quarter,” he said.

According to him, this decline is attributable to a fall in household consumption, government spending and investment, and business investment in non-residential buildings.

Exports of goods and services also fell by 0.9 per cent, having risen in the two previous quarters. Meanwhile, imports rose by 0.1 per cent, which contributed to the deterioration in the trade balance, according to the institute.

“Quebec’s economy relies heavily on exports. However, the shift towards protectionism in the United States continues to weigh on growth prospects,” noted Sonny Scarfone, senior economist at Desjardins, in a report.

Consumer spending fell by 0.3 per cent in the first quarter, after rising by 0.6 per cent in the previous quarter. Consumer spending by public authorities fell by 0.9 per cent, whilst that by households fell by 0.1 per cent.

Investment expenditure, meanwhile, fell by 0.3 per cent in the first quarter, following a rise of 0.7 per cent in the previous quarter. Investment expenditure by the public sector fell by 3.0 per cent, whilst that by businesses rose by 0.4 per cent.

“Looking ahead to the coming quarter, the improvement in the province’s labour market in May is encouraging, provided it is sustained,” said King.

He pointed out that several temporary factors will provide a short-term boost to growth in the second quarter, such as the Montreal Canadiens’ participation in the playoffs in April and the Formula 1 Grand Prix being brought forward to May instead of June.

“As a result, growth is expected to pick up in April and May after contracting in March, but the economy’s resilience will be worth monitoring from June onwards,” he added in his note.

This report by The Canadian Press was first published in French on June 26, 2026.