‘Recession is not the word I would use’: Bank of Canada governor

Amid weeks of debate in the House of Commons on Canada slipping into a technical recession, Bank of Canada governor Tiff Macklem says that based on the data he’s seen to date, this country’s economy is weak, but “it is not clearly in recession.”

“There’s been a lot of volatility, month to month, quarter to quarter, but when you look through the bumps, I mean the economy hasn’t really grown in the last year, but it hasn’t shrunk either,” Macklem said Wednesday following his interest rate announcement, when asked if he believes Canada is in a recession.

Canada’s economy saw a contraction of GDP on an annualized basis in the last two quarters — by 0.2 per cent in the end of 2025 and by 0.1 per cent in the beginning of 2026 — meeting the definition of a technical recession.

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Macklem noted, however, that while economists typically define a recession as “a significant broad-based decline in economic activity that lasts for more than one quarter,” what is happening in Canada currently doesn’t meet that threshold, in his estimation.

“The first quarter was just barely negative after the decline in the fourth quarter last year,” he said. “If you look across industries, what you see is that, in the first quarter, more than half of industries actually grew, expanded on a year-over-year basis.”

“And as I mentioned, the unemployment rate has been relatively stable in the six-and-a-half to seven per cent range,” he also said. “So far, we have not seen a significant broad-based decline in economic activity.”

Partly contributing to the GDP contraction is that while oil exports are up, other exports, such as cars and trucks, are down, with the auto sector being one of many that is heavily reliant on the United States.

Doubling down, the central banker explicitly stated that “recession is not the word (he) would use,” while noting the Bank of Canada continues to assess all factors and is “prepared to respond as needed.”

Bank of Canada senior deputy governor Carolyn Rogers has also warned not to put too much weight on the technical recession definition, but the issue has dominated debate in the House of Commons.

Issue dominating political debate

The governing Liberals have downplayed the data, pointing to a stellar jobs report Friday, as the Opposition Conservatives continue to press on the issue.

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“There’s nothing technical about coming home from work and telling your kids that you no longer have a job and that you’re going to have to sell the house because Canada has the second highest unemployment in the G7,” Conservative Leader Pierre Poilievre said in the House of Commons two weeks ago. “That is not technical, it is real. This is a full-blown Liberal recession.”

In response, Finance Minister François-Philippe Champagne pointed to the Liberals’ “generational investment in infrastructure, in housing, in productivity and innovation,” and said the federal government is supporting Canadians with affordability measures.

Despite Macklem’s declaration, Poilievre continued to criticize the government in question period Wednesday for what he’s been calling a “Liberal recession,” and seizing on the Bank of Canada governor’s use of the word “weak” to describe the economy.

“That translates into lost jobs, lost homes, and bigger lineups at food banks,” Poilievre said. “Will the prime minister stand today, reverse the Liberal policies that caused this recession?”

Energy and Natural Resources Minister Tim Hodgson, meanwhile, accused Poilievre of “cherry picking” his points by leaving out Macklem’s assessment that Canada is not in a recession.