Prime Minister Mark Carney faced criticism on Monday for his leadership of Canada’s economy after figures showed it entered into what economists call a technical recession.
Official figures released last week showed the economy contracted by 0.1 per cent in the first quarter of the year, following one per cent negative growth in the fourth quarter of 2025.
“Mark Carney has created the only G7 economy in a recession,” Conservative Party Leader Pierre Poilievre told reporters in Ottawa, charging that people across the country were “struggling to pay their essentials.”
Canada has not experienced two consecutive quarters of negative growth since the start of the COVID pandemic in 2020.
Parts of Canada’s economy have shown resilience after more than a year of tariffs imposed by U.S. President Donald Trump.
But Trump’s sectoral tariffs targeting autos, steel, aluminum and lumber have slowed growth, and analysts say the broader uncertainty surrounding the future of U.S.-Canada economic ties has hurt the economic climate.
Canada lost 112,000 jobs in the first quarter of 2026, a figure not seen since the start of the pandemic.
Canada and the United States are set to discuss revisions to a North American free trade agreement known as CUSMA over the coming weeks. Trump is eyeing substantial changes to the deal and persistent tariffs across various sectors.
Any enduring hurdles to U.S.-Canada free trade could further unsettle Canada’s economy.
But economists have urged caution when assessing whether it is in fact in recession, noting that the first quarter contraction was marginal.
“Yes, real GDP has contracted for two consecutive quarters. But while this is a necessary condition to call a recession, it is not sufficient,” economists at Desjardins said in a note last week.
“More than half of the industries in Canada have been expanding over the past six months, and consumers have continued to increase their purchases of goods and services,” the note said.
