PM Carney says economic plan 'settling in' despite recession

Prime Minister Mark Carney acknowledged the economy is showing "weakness" Tuesday after Statistics Canada confirmed Canada has entered technical recession territory — two consecutive quarters of negative GDP growth.

Carney said the government's plans to reduce immigration and government spending, expand non-U.S. trade, and build major infrastructure projects are "settling in," and that economic data will remain "uneven" as these changes take effect.

The latest figures showed the economy contracted 0.1 per cent in the first quarter of 2026, with the final quarter of 2025 revised downward to a larger decline of one per cent. Most economists define two back-to-back quarters of negative GDP as a technical recession, though some have pushed back on the label, pointing to positive signals including increased business investment and household income growth outpacing inflation.

Conservative Leader Pierre Poilievre seized on the data to call for an emergency debate, arguing there's nothing "technical" about a recession when Canadians are struggling to afford food and shelter.

Carney's first public comments on the recession came after he initially walked away from reporters' questions on the topic Monday. The economic backdrop has intensified political pressure as trade negotiations with the U.S. continue ahead of a July 1 deadline to renew or replace the continental free trade agreement.