By Paul Vieira
OTTAWA–There are signs of economic weakness in Canada, Prime Minister Mark Carney said, adding that this reflects policy decisions made since he came to power that have been aimed at rewiring the economy to deal with U.S. tariffs.
“The data is going to be uneven, and we see some weakness, in part because of clear decisions by the government,” Carney told reporters in Ottawa, marking the first time he has addressed a Statistics Canada report indicating gross domestic product declined in the January-to-March period, or a second straight quarterly decline.
Carney cited a policy decision to limit the number of immigrants allowed to enter the country annually, which economists say is weighing on aggregate activity. Canada’s economy fell 0.1% on a seasonally adjusted annualized basis in the first quarter–although on a per-capita basis GDP grew close to 1%.
Carney added that the government has curtailed growth in spending. The data agency said public-sector spending declined in the first quarter.
He said his government is revamping how the public sector operates and how major projects are approved, while also pursuing a trade-diversification strategy aimed at relying less on exports to the U.S. to fuel growth.
“The foundations are coming into place, settling in for that stronger, more resilient economy,” Carney said. “There’s more to be done, without question, but [we are] moving in the right direction,” he said, citing a pickup in the first quarter in investments tied to machinery and intellectual property.
The two straight quarters of negative GDP growth can be described as a so-called technical recession, although a senior Bank of Canada official and most economists argue it is premature to use that label to describe the current state of Canada’s economy.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
06-02-26 1031ET