Retail sales defy expectations, but spending may be running out of gas.

Canadian consumers showed some resilience in the first quarter, and spending appears set to support economic growth—a reversal from the last quarter. While March’s gains were driven almost entirely by higher prices, our spending tracker suggests spending volumes continued to expand in April in line with Statistics Canada estimates. The key question is how long this resilience can last as higher gasoline prices increasingly show up in household budgets. In other words, how long before Canadian consumers start to run out of gas?

Key Takeaways

• Retail sales posted another strong month of nominal sales, growing 0.9% in March. This was largely concentrated in spending at gasoline stations and fuel vendors on higher gasoline prices. Strip out gasoline stations and motor vehicles, core retail sales were down 0.1%. March retail volumes point to a weak month, down 0.7% in March.

Implications

Strength in the numbers but shouldn’t overplay the resilience as the energy shock is starting to show up in March data. Stronger retail sales volumes in the first quarter should be a contributor to Q1 GDP which will be released on May 29, 2026.

Charts and Tables