"The decrease in May was primarily due to lower non-conventional oil extraction, a consequence of the Fort McMurray wildfire and evacuation," the release explained.
The wildfire in Fort McMurrey, Alaberta, which spread across 1.5 million acres (590,000 hectares) from May to July, resulted in the output drop for goods-producing industries, according to the agency.
"The mining, quarrying, and oil and gas extraction sector fell 6.4%, as the output of the non-conventional oil extraction industry recorded a 22% drop," the release said.
In June, the International Monetary Fund said the Canadian economy faces the worst challenge in years caused by declining oil prices.
Oil benchmark prices went down again on Friday due to the ongoing oversupply, with oil trading at slightly over $40 a barrel.