Prime Minister Mark Carney acknowledged that Canada's recent economic contraction, marked by two consecutive quarters of negative GDP growth, is partly influenced by the government's scaled-back immigration targets. This statement follows a Statistics Canada report indicating a 0.1 percent annualized decline in the first quarter, with economists debating whether this constitutes a recession. The economic slowdown is further attributed to U.S. trade policies and a dip in domestic demand.
The government's strategy to boost investment is aimed at long-term economic resilience. However, the interim period is expected to show uneven data. Concerns over housing and labor markets led to a reduction in immigration admissions, contributing to Canada's first recorded annual population decline in 2025. While some economists point to this demographic shift influencing per capita growth, the overall economic outlook remains fragile amid global uncertainties.
