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

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.

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.

The post Canada Is in a Technical Recession: 3 TSX Stocks to Buy Now appeared first on The Motley Fool Canada.

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More reading

• What the Average Canadian TFSA Balance Looks Like at 70 — and it Might Surprise You
• 3 of the Best Canadian Stocks for a Buy and Hold in a TFSA
• The TFSA Balance You’ll Probably Need to Retire in Canada
• 2 Stocks I’d Pair Together for a Winning TFSA in 2026
• How to Convert $25,000 in TFSA Savings Into Reliable Cash Flow

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Waste Connections. The Motley Fool recommends Fortis and Restaurant Brands International. The Motley Fool has a disclosure policy.