The Toronto Stock Exchange surged 404 points higher to a record high of 35,205 at midday, as most sectors rally.
Healthcare and financials are the best performers, up 2.0% and 1.6%, respectively.
Materials and telecoms are the worst performers, both down 1%.
In economic news, the Canadian Parliamentary Budget Office now projects real gross domestic product growth of 1.1% for this year and 1.6% for 2027, down from last September's projection of 1.3% and 1.8%, respectively.
The PBO, which is now treating the current tariff environment as permanent, said its Economic and Fiscal Outlook for June 2026 assessed that the Canadian economy grew by 1.7% in 2025, "with a weakened outlook thereafter".
After accounting for historical revisions, nominal GDP is projected to be, on average, $19.5 billion higher annually over the 2026 to 2030 period compared with the outlook from September, due to stronger energy prices, the PBO calculates. PBO's status quo fiscal outlook includes the incremental measures announced in Budget 2025 and the Spring Economic Update 2026. Combined, these measures amount to $68.4 billion in (net) new spending over 2025-26 to 2030-31.
PBO projects Canada's budgetary deficit to increase from $36.3 billion, or 1.2% of GDP, in 2024-25 to $72.0 billion, 2.2% of GDP, in 2025-26 as modest revenue growth is outpaced by growth in expenses, reflecting the introduction of new measures.
In other news, Morningstar, in a note titled '10 Top-Performing Canadian Dividend Stocks', said Barrick (ABX.TO) and Great-West Lifeco (GWO.TO) were among May's high-yielding winners.
"Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide steady income, cushion against market downturns, and grow investments at a healthy clip," Morningstar said.
In May 2026, the top-performing dividend payers included airline Exchange Income (EIF.TO), industrial distributor Russel Metals (RUS.TO), and telecom services firm Quebecor (QBR-B.TO), it noted.
The Morningstar Canada Index, which measures the performance of Canada's broad regional markets, targeting the top 97% of stocks by market capitalization, was screened for companies with a forward dividend yield of at least 1.5%, excluding real estate investment trusts, it added.