- Florence Jean-Jacobs
Principal Economist
Economic News
June 19, 2026
Consumers Keep Spending Despite Higher Gas Prices
Highlights
- Retail sales increased by 0.5% m/m in April, one tick below Statistics Canada’s earlier flash estimate and the survey of economic forecasters (0.6%).
- Excluding price growth, retail sales volumes were flat in April (graph).
- Nominal sales were driven upward by gasoline stations and fuel vendors (+5.1%) and motor vehicle and parts dealers (+1.7%). See table for details.
- Nominal sales at gas stations were primarily boosted by prices, but volumes also rose in the month. Because retail trade data exclude sales tax, the temporary suspension of the federal fuel excise tax, starting April 20, didn’t introduce price effects. Although it is possible that its removal influenced volume purchases and freed up some room in household budgets for other purchases.
- Core retail sales—which exclude autos and gas—posted a second consecutive monthly decline (-0.7%). Gains at gardening and building material retailers were more than offset by lower receipts at food and beverage, general merchandise, and sporting goods and miscellaneous retailers.
- April retail sales were up in Alberta, Quebec and Ontario, yet declined in the Toronto CMA.
- Statistics Canada’s advance indicator points to a solid 1.0% increase in May. However, it’s too early to tell if this is mostly driven by higher prices.
Implications
Canadian consumers continue to demonstrate resilience, despite the multiple headwinds facing the economy. The first quarter proved positive, with real retail sales growing 5.0% q/q annualized. And after falling 0.6% m/m in March, retail volumes remained steady to begin Q2. The advance indicator for May is also encouraging. Were CPI goods prices to have advanced at a similar pace than in April (0.7%, seasonally adjusted), it would suggest a return to positive retail volume growth in May. Another positive sign for May is the sizeable job creation in the Canadian economy that month.
The April momentum in auto sales came as a welcome surprise, since dealerships had been reporting depressed volume sales so far this year compared to 2025. In May, the first 2,910 Chinese EVs entered Canada under the new trade agreement, although most will only be reflected in sales figures in June, according to DesRosiers Automotive Consultants.
Slower population growth remains a headwind. So is the uncertain trade outlook. And despite a possible resolution to the conflict in Iran, gasoline prices will likely remain elevated this year, reducing consumer purchasing power.
But other factors should help cushion the negative impact on disposable incomes in the coming months, including fiscal transfers to households eligible for the Canada Groceries and Essentials Benefit. Domestic tourism and retail activity surrounding major sporting events could also provide a boost.
In all, we expect household consumption to continue to contribute positively to GDP growth in Q2 and Q3, as it did in the past two quarters. After today’s release, we are tracking real GDP growth of around 1.5% annualized in Q2 2026, as per our latest Economic and Financial Outlook.