Prime Minister Mark Carney said Canada’s economy showed weakness after two straight quarters of decline, but he argued the federal government’s growth plan was starting to take hold.
Statistics Canada reported the contraction last week. However, Carney did not directly answer on Tuesday when reporters asked whether Canada had entered a recession.
Carney said cuts to immigration and government spending were weighing on growth. He added that the government’s effort to reshape the economy would take time.
The prime minister pointed to stronger business investment in machinery and equipment. He also cited household income growth that outpaced inflation in the latest economic report.
Meanwhile, Conservative Leader Pierre Poilievre accused Carney of avoiding the label of a recession. He said job losses, higher insolvencies and rising food bank use showed Canadians were worse off.
Bank of Canada senior deputy governor Carolyn Rogers told a parliamentary committee Monday that two consecutive quarters of annualised GDP contraction meet one definition of a recession. However, she said policymakers should look beyond one indicator.
Read: Canada Technical Recession Hits As GDP Falls 0.1%
The economic data also drew attention from US President Donald Trump. He posted “51st State!” on Truth Social with a link to a report on Canada’s technical recession.
Carney said Trump uses social media frequently and that Ottawa would not react to every post. Ontario Premier Doug Ford also rejected the remark, saying Canada would remain sovereign.
Trade talks between Canada and the United States remain stalled before next month’s review of the Canada-United States-Mexico Agreement.
Canada-US Trade Minister Dominic LeBlanc was expected to meet US Trade Representative Jamieson Greer in Washington on Tuesday.
Finance Minister François-Philippe Champagne said he remained confident in Canada’s economy. He cited International Monetary Fund forecasts that put Canada among the faster-growing Group of Seven economies this year and next.
