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Canada’s Recession Authority Says It’s Too Soon to Declare a Recession
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| Citation | . 2026. Canada’s Recession Authority Says It’s Too Soon to Declare a Recession. Media Releases. Toronto: C.D. Howe Institute. |
| Page Title: | Canada’s Recession Authority Says It’s Too Soon to Declare a Recession – C.D. Howe Institute |
| Article Title: | Canada’s Recession Authority Says It’s Too Soon to Declare a Recession |
| URL: | https://cdhowe.org/publication/canadas-recession-authority-says-its-too-soon-to-declare-a-recession/ |
| Published Date: | June 5, 2026 |
| Accessed Date: | June 5, 2026 |
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June 5, 2026 – It’s too early to conclude that the Canadian economy is in recession, according to the C.D. Howe Institute’s Business Cycle Council, following Statistics Canada’s latest GDP data showing a second consecutive quarterly decline in real output.
Widely recognized as Canada’s recession-dating authority, the Council, comprised of Canada’s preeminent economists, said it does not accept the definition of a “technical recession,” two consecutive quarters of falling GDP, as the true measure of a recession.
Under its methodology, the Council classifies a recession as “a pronounced, persistent and pervasive decline in real economic activity,” and relies on several guidelines for making its determination. These include a significant decline in aggregate economic activity lasting at least one quarter; accompanying weakness in contiguous quarters; and a pervasive decline in economic activity across a large number of sectors.
“The two-quarter drop in GDP (0.28 percent) was of very low amplitude compared with any recession previously declared by the Business Cycle Council,” said the Council.
For instance, the cumulative drop in GDP during the 1974 to 1975 recession was 1.1 percent. Meanwhile, for Canada’s four subsequent recessions, cumulative declines were much larger – ranging from 3.4 percent in 1990-1992 to 12.7 percent in 2020.
Further, the Council highlighted growth in GDP in the third quarter of 2025, and a falling unemployment rate, as data that do not support a recession call at this time.
It added that the forthcoming review of the Canada-United States-Mexico Agreement (CUSMA) continues to be a cause for concern for economic growth, and that the Council stands ready to meet to discuss if GDP and employment continue to show signs of strain across a broad range of sectors.
For more information contact: Jeremy Kronick, Co-Chair of the Business Cycle Council, and President and CEO, C.D. Howe Institute; and Lauren Malyk, Manager of Communications, 416-873-6168, lmalyk@cdhowe.org
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