Bullish predictions about Canada's economic recovery were dimmed somewhat after a tough winter that slowed spending.
The economy surprised the experts as it dipped to 1.2 percent growth in the first three months of the year, the slowest pace since the fourth quarter of 2012.
The output slowed in numerous key sectors and was partially blamed on the harsh winter weather — a similar situation as in the United States where the economy contracted by 1 percent in the first quarter.
Economists had predicted Canada's growth at 1.8 percent while the Bank of Canada had expected 1.5 percent.
Central bank governor Stephen Poloz had called on business owners to make new investments and improve productivity to push the economy into the next phase of the recovery.
Instead, investment in machinery and equipment fell by 1.5 percent, spending on computers was down 4.1 percent and exports fell 0.8 percent.
The report is expected to be another factor for the bank to keep the key interest rate and borrowing costs low.
Nation commits $3.5B more for child health
Canada is committing another $3.5 billion over five years for Prime Minister Stephen Harper's maternal, newborn and child-health initiative.
The money is in addition to the $2.8 billion commitment he announced at the Canadian-hosted G8 summit in 2010.
The expanded amount will go toward immunization, nutrition and birth and death registration in developing countries.
A signature priority of Harper, the money is to help young mothers and infants who die in numbers that experts describe as alarming.
Harper said he plans to "persuade and cajole" other countries to follow Canada's lead.
News in brief
• Former prime minister Brian Mulroney, 75, is to be named head of Quebecor, one of Canada's largest media companies. He is currently vice chair and will succeed CEO Robert Depatie, who has left due to health reasons. Former vice chair Pierre Karl Peladeau, son of company founder Pierre Peladeau, quit earlier this year to become a separatist Parti Quebecois politician.
• Historic Canadian hotels, the Royal York in Toronto and Hotel Vancouver, are for sale. The Quebec pension fund owners, Caisse de depot et placement, has been getting out of the hotel business and earlier sold Ottawa's Chateau Laurier. The company still owns the Chateau Frontenac in Quebec City and the Queen Elizabeth in Montreal. Asking prices for the hotels managed by Fairmont Hotels and Resorts were not disclosed.
Facts and figures
Canada's dollar has advanced to 92.22 cents U.S. while the U.S. dollar returns $1.0843 in Canadian funds, before bank exchange fees.
The Bank of Canada's key interest rate is steady at 1 percent while the prime-lending rate is 3 percent.
Stock markets are lower, with the Toronto exchange index at 14,588 points and the TSX Venture index at 979 points.
The average price of a liter of gasoline in Canada is higher at $1.3557 (Canadian).
Lotto 6-49: (May 28) 13, 23, 28, 31, 34 and 38; bonus 8. (May 24) 5, 9, 37, 43, 46 and 48; bonus 14. Lotto Max: (May 23) 3, 11, 16, 24, 31, 39 and 43; bonus 2.
• Knowlton Nash, veteran Canadian Broadcasting Corp. newscaster and commentator, has died at age 86. Nash, who had a 37-year career with the public broadcaster, had a long battle with Parkinson's disease. He was the anchor for a decade of The National, CBC's flagship news program, and "felt like family to his audience," said current anchor Peter Mansbridge.
• Samuel Frappier, 19, of Quebec was rescued after a harrowing night in frigid temperatures stuck on a ledge of Longs Peak in Rocky Mountain National Park in Colorado. He was stranded on the snowy ledge while descending from the 14,255-foot level. Thirty park rescuers and two helicopters were involved reaching Frappier and lowering him safely from his perch.
• The long-awaited testing of the restored Nova Scotia icon, the Bluenose II schooner, was called off at the last minute. Government officials and the media had arrived at Lunenburg harbor as the ship was to undergo sailing tests. It was learned that it couldn't leave the dock because it didn't have a certificate from the American Bureau of Shipping.
Jim Fox can be reached at [email protected]