Despite recent GDP reports showing two consecutive quarters of negative growth-a technical recession-the Bank of Canada and several economists are holding off on formally declaring one.
Senior Deputy Governor Carolyn Rogers told a House committee Monday, "I think we need to be careful not to put too much weight in any one indicator." Economists like BMO's Doug Porter also argue the slump lacks the depth to qualify.
The annualized GDP fell 1% in Q4 2025 and 0.1% in Q1 2026. However, Rogers noted that employment, leading indicators, and a rebound in April's flash data suggest looking beyond the GDP metric.
Conservative Leader Pierre Poilievre criticized Prime Minister Mark Carney for not being present in the House to address what he called "your recession."
Canada's unemployment rate hit 6.9% in April, with 18,000 jobs lost. Inflation spiked to 2.8% due to gas prices, though core inflation fell to 2%. Scotiabank's Derek Holt pointed to surging gold imports and tariff volatility as distorting factors. The Bank of Canada is expected to hold interest rates steady, with potential cuts if the economy weakens further.