Between U.S. President Donald Trump reviving his “51st state” rhetoric, Prime Minister Mark Carney appearing to snub a journalist’s question on claims of a recession, and Opposition Leader Pierre Poilievre saying Canadians are getting poorer, many people are asking the same thing: Is Canada in a recession?
What to know
- Statistics Canada reported Canada’s GDP declined for a second consecutive quarter.
- Two straight quarters of negative growth meet the commonly used definition of a technical recession.
- The Bank of Canada says recession assessments should consider employment and other economic indicators, not just GDP.
- Prime Minister Mark Carney acknowledged economic “weakness” but did not describe Canada’s situation as a recession.
- Opposition Leader Pierre Poilievre has used the latest economic figures to criticize the government’s handling of the economy.
What is a technical recession?
A technical recession occurs when a country’s gross domestic product (GDP) declines for two consecutive quarters.
According to StatCan data, the GDP has dropped 0.1 per cent in the first quarter of 2026, after it already dropped one per cent in the last quarter of 2025.
Because the economy has now contracted for two straight quarters, Canada meets the common definition of a technical recession.
A spokesperson for the Bank of Canada told Now Toronto it doesn’t have its own definition of recession, but said “some economists define it as two consecutive quarters of negative growth.”
However, speaking at a Public Accounts Committee Meeting on Monday, Senior Deputy Governor Carolyn Rogers said other factors need to be considered before labeling an actual recession.
“When there is a lot going on in the economy as there is right now. There’s things pulling different parts of the economy in different directions, you’re going to get some noise in the data,” she said.
“Simply the fact that you have to put the term ‘technical’ in front of it sort of tells you that you need to really look past that one indicator, you need to look at employment, you maybe need to look at some of the more leading indicators…We need to be careful not to put too much weight in any one indicator.”
What is Mark Carney saying on Canada slipping into a ‘technical recession’
Speaking with reporters on Tuesday, Carney acknowledged that there has been “some weakness” in the economy due in part to government decisions, including the reduction of immigration levels and control of government spending. However, the prime minister did not use the word “recession.”
“This government has been in the process of laying the foundations for a stronger, more resilient, more independent Canadian economy. That process is settling in. During that time, as we make major investments, major changes, as we do all that, the data is going to be uneven,” he told reporters.
“But we’re also seeing at the same time the foundations coming into place, settling in for that stronger, more resilient economy.”
