Carney blames immigration cuts for Canada’s 'technical recession'

VANCOUVER — Prime Minister Mark Carney on Tuesday said his government’s deliberate decision to slash immigration levels was one factor behind Canada’s slide into what he and others have euphemistically described as a "technical recession," despite previously blaming high immigration for Canada's economic weakness through a strain on housing and employment..Speaking to reporters ahead of a cabinet meeting, Carney acknowledged “some weakness” in the latest economic data after Statistics Canada confirmed two consecutive quarters of annualized GDP contraction.“We have taken back control of immigration. That’s meant the population growth has flattened,” Carney said. “In fact, it’s slowed or it’s been negative for the last two quarters.” He also pointed to reduced government spending as contributing to the softer headline numbers.The remarks mark a notable pivot for Carney, who just months ago warned that post-pandemic immigration surges were “unsustainable” and had exceeded Canada’s absorptive capacity for housing, health care, infrastructure and jobs..By sharply cutting temporary residents, international students and overall targets, the Canadian government has slowed the demographic tailwind that had previously masked weak per-capita productivity and propped up aggregate GDP growth. Carney framed the current slowdown as a necessary “settling-in” period as Ottawa pursues major infrastructure projects, diversifies trade away from the United States amid tariff tensions, and refocuses immigration on skilled workers.“The data’s going to be uneven,” he said, while insisting the foundations are being laid for a “stronger, more resilient, more independent Canadian economy.”Economists and even foreign political figures have frequently highlighted Canada’s heavy reliance on immigration-fuelled population growth to deliver headline economic expansion. The rapid policy correction now appears to have removed that boost at a vulnerable time, contributing to the technical recession — defined as two straight quarters of GDP decline..The government’s 2026-2028 immigration plan slashes new temporary resident arrivals to 385,000 in 2026 — a 43% reduction from the 2025 target of roughly 674,000 — including cutting international study permits nearly in half to 155,000.

Carney blames immigration cuts for Canada’s 'technical recession'

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