Canada's economy returned to growth in April, offering some relief after months of gloomy economic talk. According to Statistics Canada, real gross domestic product, the broadest measure of economic activity, expanded by 0.5 percent during the month, a result that helps to ease fears that the country had slipped into a sustained downturn.
Much of the momentum came from the energy sector, with oil and gas helping to power the economy at the start of the second quarter of the fiscal year. The gains, however, were not confined to a single industry. Statistics Canada noted widespread growth across the economy, with manufacturing, construction and the public sector all contributing to the upturn in April.
The positive figure is significant because of what came before it. The April growth follows a contraction in March, which had dragged the first quarter of the year slightly into negative territory, with a decline of around 0.1 percent. That quarter itself came on the back of negative growth in the final quarter of the previous year.
Two consecutive quarters of negative growth technically meet the common definition of a recession, and that arithmetic fuelled a heated political debate. The opposition Conservatives seized on the numbers, declaring that the country had entered a full-blown recession and using the data to attack the government and to chip away at the economic credibility of Prime Minister Mark Carney.
At the time, however, the recession label was far from universally accepted. Many economists, from major banks to private forecasting firms, disputed the characterisation, arguing that the underlying picture was more nuanced than the headline quarterly figures suggested and that the economy was not in the kind of broad, sustained decline the term usually implies.
The April rebound now adds weight to that more cautious reading. While a single month of growth does not by itself settle the debate over the health of the Canadian economy, the return to expansion, driven by both energy and a range of other sectors, provides a counterpoint to the recession narrative and will be closely watched as a sign of where the economy is heading.