Carney says economy is in a settling-in period after technical recession

Prime Minister Mark Carney said Canada’s economy is undergoing a major transition as his government responds to the U.S. trade war, describing the recent downturn as part of a “settlingin” period. Carney made the remarks in Ottawa on Tuesday after Statistics Canada reported that real GDP fell for a second straight quarter, meeting the usual definition of a technical recession. He said the government is laying the groundwork for a stronger and more resilient economy through major investments, changes to government operations, new trade deals, and efforts to support major projects. Economists quoted in the article noted that the weakness in early 2026 was affected by lower government spending and investment, weaker exports, and a drop in business investment. Some analysts and Bank of Canada officials also cautioned against reading too much into the recession label, pointing to volatility from weather, trade swings, and unusual gold imports as well as signs of a possible rebound later in the year.