Prime Minister Mark Carney said his government's economic plan is "settling in" as Canada entered a technical recession this year.
The admission comes as the government attempts to pivot the national economy toward growth. A technical recession typically signals a period of economic contraction that can lead to slower wage growth and reduced consumer spending across the country.
Speaking from Ottawa, Carney said there is "some weakness" in the Canadian economy. He noted that the technical recession spanned the six-month period between October 2025 and March 2026 [1].
Despite the contraction, the Prime Minister maintained that the current economic strategy is functioning as intended. Carney said "the data would be uneven" as the plan progresses, suggesting that short-term volatility is expected during the transition period.
To combat the downturn, the government is focusing on a strategy to expand trade, reduce immigration levels, and increase public spending. These measures are intended to revive growth and stabilize the GDP after two consecutive quarters of decline.
Carney did not provide specific targets for the recovery but said that the structural changes to the economy require time to manifest in official statistics. He said the government remains committed to the current trajectory despite the technical recession status.
“the government's economic plan is "settling in"”
A technical recession, defined by two consecutive quarters of negative GDP growth, often triggers political pressure for immediate stimulus. By framing the current decline as a 'settling in' period, the Carney administration is attempting to manage public expectations and decouple the technical definition of a recession from the perceived failure of its policy goals.
