Canada Is in a Technical Recession: 3 TSX Stocks to Buy Now

A Canadian recession doesn’t force you into cash; it forces you into higher-quality, everyday-need businesses.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published June 1, 8:00 pm EDT

Key Points

In a slowdown, focus on companies tied to habits and essentials that customers can’t easily cut.
QSR can hold up through brand scale and “cheap meal” demand, even if consumers get cautious.
Fortis and Waste Connections offer recession-resilient, regulated or recurring services, though valuation and rate risks still matter.

Canada just gave investors a warning shot. The economy slipped into a technical recession after gross domestic product fell at an annualized pace of 0.1% in the first quarter of 2026, following a revised 1% decline in the final quarter of 2025.

That doesn’t mean every Canadian household feels a recession the same way. It does mean investors should get pickier. When growth cools, I’d rather own companies tied to everyday spending, essential services, and habits people don’t abandon easily.

GettyImages-1394663007 — Source: Getty Images

QSR

Restaurant Brands International (TSX: QSR) fits that plan because Canadians still buy coffee and quick meals when budgets tighten. QSR owns Tim Hortons, Burger King, Popeyes, and Firehouse Subs, giving it global scale with a very Canadian anchor. The business earns from restaurant sales, franchise fees, and brand growth across many countries. That mix can help smooth results when one banner or region has a slower quarter.

The latest quarter showed solid momentum. In the first quarter of 2026, QSR reported adjusted earnings per share of US$0.86, up 14.6% from last year. Income from operations climbed 39.3% to US$606 million. That kind of growth looks useful when investors worry about the economy.

The appeal now comes from resilience and brand power. Tim Hortons remains a daily habit for millions. Burger King and Popeyes add international growth potential. The risk sits in consumer pressure. If households trade down further, restaurant traffic and franchisee margins could feel it. Still, QSR has pricing power and scale, which makes it a strong recession watchlist stock.

FTS

Fortis (TSX: FTS) brings a different kind of safety. The utility owns regulated electric and gas assets across Canada, the United States, and the Caribbean. Customers still need heat, lights, and power in weak markets. That makes Fortis stock one of the easier TSX stocks to understand when headlines get ugly.

In the first quarter of 2026, Fortis reported net earnings of $501 million, or $0.99 per share. It also invested $1.4 billion during the quarter and kept its $28.8 billion five-year capital plan on track. That plan should grow its rate base from $42.4 billion in 2025 to $57.9 billion by 2030.

The dividend story adds comfort. Fortis stock expects annual dividend growth of 4% to 6% through 2030. That’s exactly the kind of visibility investors may want during a downturn. Risks include higher interest rates, regulatory decisions, and construction costs. Yet Fortis has navigated tough markets before, and its essential-service model still looks built for stress.

WCN

Waste Connections (TSX: WCN) may not sound exciting, but that’s part of the charm. The company collects, transfers, recycles, and disposes of waste across North America. Garbage doesn’t disappear during a recession. Businesses may slow down, but households, municipalities, and commercial customers still need reliable waste service.

The latest results backed that up. In the first quarter of 2026, Waste Connections reported revenue of US$2.4 billion, up 6.4% from last year. Adjusted earnings per share (EPS) came in at US$1.23, ahead of analyst expectations. The company also benefits from disciplined acquisitions and strong local market positions.

Waste Connections usually trades at a premium, and investors shouldn’t ignore that. A rich valuation can limit short-term upside if markets fall. It also faces fuel costs, labour inflation, and integration risk from acquisitions. But quality rarely looks cheap for long. A pullback could give patient investors a better entry into a durable compounder with pricing power, recurring revenue, and a service customers can’t delay forever.

Bottom line

A technical recession doesn’t mean investors should hide in cash, but should demand stronger businesses. QSR, Fortis stock, and Waste Connections each bring something useful: habit-driven spending, essential utilities, and must-have waste services. If the market keeps wobbling, these are three TSX stocks I’d want on my buy list now for 2026 and beyond.