Prime Minister Mark Carney says the government's plan to build up the economy is "settling in" as work continues on getting major projects built and expanding non-U.S. trade relationships.
In his first public comments on the state of the economy since Statistics Canada reported two consecutive quarters of economic decline last week, Carney said the numbers show signs of "weakness."
When asked by a reporter Tuesday morning whether he thought Canada was in a recession, Carney did not answer directly.
Carney said on his way into a cabinet meeting that cuts to immigration and government spending are weighing on growth. He also said the work to pivot the economy is going to take time to pay off.
"As we do all that, the data is going to be uneven. And we see some weakness, in part because of clear decisions by the government," he said.
"So you have these cross-currents as the economy is being fundamentally transformed. We're going to continue to work. We are making progress but there's more to be done."
The prime minister pointed to positive signs in the latest economic report, including increasing business investment in machinery and equipment and household income growth outpacing inflation.
Conservative Leader Pierre Poilievre on Tuesday accused Carney of not being straight with Canadians about the state of the economy.
Poilievre pointed to job losses and a rise in insolvency rates and food bank usage over the past year as signs that Canadians are worse off since Carney took office.
"They deserve a prime minister who will look them in the eye and admit that there is a recession," he told reporters outside the Liberal cabinet meeting.
Many economists have dismissed the recession label, arguing the recent slump doesn't have the depth or breadth to meet that bar.
Appearing before a parliamentary committee on Monday, Bank of Canada senior deputy governor Carolyn Rogers warned MPs against putting too much stake in one economic indicator — particularly when there's a great deal of "noise" in the data.
“Two quarters of annualized contraction in GDP does meet one definition of a recession, but 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,” she said.
Picture Courtesy: THE CANADIAN PRESS/Justin Tang
