Prime Minister Mark Carney acknowledged that the Canadian economy was weak while defending the federal government’s economic agenda on Tuesday, June 2, 2026. However, he stopped short of using the word “recession.”
When reporters in Ottawa directly asked Carney whether Canada was in a recession, he responded that the government was focused on laying the foundations for a stronger, more resilient, and more independent Canadian economy.
He said this process involves making major investments, implementing significant changes to how the government operates, improving the way major projects are undertaken, and pursuing new trade agreements with other countries.
Carney’s comments were his first on the issue since Statistics Canada released data on Friday, May 29, showing a slight contraction in gross domestic product (GDP) for two consecutive quarters, meeting the technical definition of a recession.
Canada’s GDP declined at an annualized rate of 1% during the final three months of 2025 and contracted by a further 0.1% in the first quarter of 2026.
The prime minister said that part of the economic slowdown resulted from “clear decisions by the government,” including efforts to reduce immigration levels and curb government spending.
Carney added that there was also some volatility in investment activity, which was being reflected in the economic data. Nevertheless, he maintained that the foundations were being put in place for a stronger and more resilient economy.
During last year’s federal election campaign, Carney pledged to build “the fastest-growing economy in the G7.” Since then, however, he has repeatedly highlighted the uncertainty surrounding Canada’s trade relationship with the United States and its impact on the Canadian economy.
Speaking before a House of Commons committee on Monday, June 1, Senior Deputy Governor of the Bank of Canada, Carolyn Rogers, said Canadians should “be careful not to place too much weight on any single indicator.”
