{"id":710776,"date":"2026-06-02T21:00:11","date_gmt":"2026-06-02T21:00:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/710776\/"},"modified":"2026-06-02T21:00:11","modified_gmt":"2026-06-02T21:00:11","slug":"carney-attributes-weakness-in-economic-data-to-lower-immigration-targets","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/710776\/","title":{"rendered":"Carney attributes \u2018weakness\u2019 in economic data to lower immigration targets"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Prime Minister Mark Carney arrives for Tuesday’s federal cabinet meeting on Parliament Hill.Justin Tang\/The Canadian Press<\/p>\n

Prime Minister Mark Carney responded Tuesday to a report showing the Canadian economy has contracted for two consecutive quarters, saying part of the \u201cweakness\u201d is linked to the government\u2019s decision to scale back immigration. <\/p>\n

He said the government\u2019s plans to boost investment will ultimately produce a \u201cstronger, more resilient economy\u201d but that economic data will be \u201cuneven\u201d in the interim.<\/p>\n

\u201cYou have these cross currents as the economy is being fundamentally transformed. We\u2019re going to continue to work. We\u2019re making progress, but there\u2019s more to be done,\u201d he said.<\/p>\n

Mr. Carney\u2019s comments are his first response to Friday\u2019s Statistics Canada report, which said the Canadian economy contracted by 0.1 per cent on an annualized basis in the first quarter of the year. That follows a 1-per-cent annualized decline in gross domestic product in the previous quarter.<\/p>\n

Canada\u2019s economy stalls, posting consecutive quarterly declines<\/a><\/p>\n

Two consecutive quarters of negative GDP growth is sometimes referred to as a \u201ctechnical recession,\u201d although many economists dismiss the term. A recession is generally marked by a significant decline in economic output that affects a broad range of industries and lasts for at least several months.<\/p>\n

Economists on Bay Street say it is premature to determine whether Canada has fallen into a recession \u2013 not only because the first-quarter decline was small, but because Statscan will revise the GDP figures at a later date, as is customary.<\/p>\n

Conservative Leader Pierre Poilievre has seized on the term, however, using it repeatedly on Parliament Hill. After Mr. Carney made his comments to reporters Tuesday morning on his way into a cabinet meeting, Mr. Poilievre appeared before that same gathering of journalists outside the cabinet room to again highlight the economic figures.<\/p>\n

The Conservative Leader accused the Prime Minister of \u201chiding\u201d from reporters since Friday\u2019s Statistics Canada report.<\/p>\n

\u201cYou asked him point blank: \u2018Are we in a recession?\u2019 and he refused to answer that question. Five days have gone by. The Prime Minister has been in hiding from this devastating economic report. And when he does finally appear, he can\u2019t even answer a basic yes or no question,\u201d he said.<\/p>\n

While economists aren\u2019t convinced Canada is in a recession, there is no question economic growth effectively stalled through the end of 2025 and beginning of 2026. And it has struggled to make headway over the past year in the face of aggressive U.S. trade policy, contracting in three of the past four quarters.<\/p>\n

U.S. tariffs on autos, industrial metals and wood products are hammering exports while uncertainty about the review of the United States-Mexico-Canada trade agreement is smothering business investment. Unemployment is elevated at 6.9 per cent and the housing market remains in a slump. <\/p>\n

USMCA should be renewed for 16 years, LeBlanc writes to U.S. and Mexico<\/a><\/p>\n

The Q1 GDP numbers showed consumer spending continues to be relatively robust, but overall \u201cdomestic demand\u201d declined 0.4-per-cent annualized in the quarter. A drop in government spending on weapons systems and a large jump in imports, which get subtracted from the GDP tally if they exceed exports, also contributed to the fall in GDP. <\/p>\n

Topline GDP numbers are also being held back by the country\u2019s declining population \u2013 a fact Mr. Carney pointed to in his comments to reporters. <\/p>\n

Following criticism of the impact of high immigration targets on Canada\u2019s housing and labour markets, the Liberal government under former prime minister Justin Trudeau announced<\/a> plans in the fall of 2024 to gradually reduce permanent resident admissions and restrict the number of temporary residents. <\/p>\n

Earlier this year, Statistics Canada reported that Canada\u2019s population declined in 2025 by more than 100,000 people, marking the first annual decline in records that date back to the 1940s.<\/p>\n

Canada reports first annual population decline on record<\/a><\/p>\n

In a recent research note about Friday\u2019s GDP data, three National Bank economists said immigration policy is a \u201ckey variable\u201d weighing on growth.<\/p>\n

\u201cDue to the ongoing slowdown in immigration decided by Ottawa, the country\u2019s population was smaller in the first quarter of 2026 than in the fourth quarter of 2025. This means that real GDP per capita growth was largely positive (+0.9%) in the last quarter and has been on an upward trend for two years,\u201d wrote National Bank economists Taylor Schleich, Matthieu Arseneau and Alexandra Ducharme.<\/p>\n

The economists were among those who said the small quarterly decline could easily be revised later.<\/p>\n

\u201cTo be clear, the Canadian economy remains fragile and faces elevated uncertainty in the coming months,\u201d they wrote. \u201cBut we are not ready to bandy about the \u2018R\u2019 word, at least not yet.\u201d<\/p>\n

There is no formal definition of a recession \u2013 technical or otherwise. <\/p>\n

The C.D. Howe Institute, the unofficial arbiter of recession in Canada, and the National Bureau of Economic Research in the U.S. make an assessment based on how sharp the contraction is, how long it lasts and how widespread the downturn is throughout different regions and sectors of the economy.<\/p>\n

Two quarters of falling GDP can be a useful rule of thumb, but it\u2019s not a hard and fast rule. The Canadian economy only contracted for two months at the outset of the COVID-19 pandemic, but the downturn was so extreme, there was little doubt it constituted a recession.<\/p>\n

By contrast, the C.D. Howe Institute determined that the two-quarter decline in GDP in 2015, after the drop in global oil prices, did not amount to a recession because the impact was concentrated regionally in Alberta and other oil-producing provinces.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Prime Minister Mark Carney arrives for Tuesday’s federal cabinet meeting on Parliament Hill.Justin…\n","protected":false},"author":2,"featured_media":710777,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[43,44,1398,714,41,39,42,40],"class_list":["post-710776","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-news","tag-nodelphi","tag-politics","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/710776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=710776"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/710776\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/710777"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=710776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=710776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=710776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}