QUESTION PERIOD — Finance
State of the Economy
June 9, 2026
Your view of a good economy is very different than that of more than 50% of Canadians.
The term “stagnation,” government leader, refers to a prolonged period of sluggishness and a failure to develop, grow or advance. In microeconomics, it denotes an extended period of weak economic growth, typically characterized by high unemployment, flat job creation and stagnant wages. Does that ring a bell?
Senator Moreau, there has been considerable debate over the past few weeks over how to define the state of the economy over the past two quarters and whether we’re in a recession. But would you at least agree that over the past several years, Canada has clearly been experiencing a period of stagnation?
I guess that there are a lot of economists who do not share your view that we are in a technical recession, Senator Housakos. I guess that is quite clear. I know that your leader in the other place thinks that we’re in the worst recession, but the worst recessions in this country have been under Conservative governments —
They all say we have stagnation.
They all have that answer?
We’re acting on macroeconomic issues, as I told your colleague Senator MacDonald, and we’re also working on microeconomic issues like providing immediate relief on groceries last June 5, ensuring children have food at school, protecting jobs unjustifiably affected by tariffs and strengthening Employment Insurance so those who face the worst of it can still provide for their families. That’s what we’re doing.
Senator Moreau, record population growth driven by years of an uncontrolled, broken immigration system under your government has helped inflate headline GDP figures. Meanwhile, GDP per capita productivity, housing affordability and overall living standards have declined, especially among young people’s demographic.
Canadians are feeling poorer than ever before, and this has nothing to do with which government is in power. These are just the facts. Does this not suggest your government’s policies have been masking underlying economic weakness rather than addressing the root cause of Canada’s stagnation?
I disagree with your premise, Senator Housakos.
The government is working very well on trade diversification. We are attracting investment. We had the second-largest foreign direct investment stock-to-GDP ratio in the G20 in 2024. Canada is consistently ranked as the top destination for foreign direct investment confidence, and Canada has the world’s most educated workforce.
We’re in a good place. We’re strong, and we will continue to make sure that our economy is growing.
Senator Moreau, in the Parliamentary Budget Officer’s recently tabled Economic and Fiscal Outlook, she projects that the budgetary deficit will increase from $36.3 billion — which it was in 2024-25 — to $71.8 billion in 2026-27 as modest revenue growth is outpaced by growth in expenses. At the same time, the report also states that the public debt charges are projected to increase from $53.4 billion to $58.9 billion in 2026-27.
Does the government agree with these projections, given that they are different from those in the recent Spring Economic Update?
The government is aiming for a long-range situation. We are working on every aspect of the economy, as I mention almost on a daily basis to Senator Housakos. We are working on affordability. We are working on child care. We are working on trade diversification, and it’s an ongoing situation.
It’s quite difficult, and the government stands behind its declaration surrounding the Spring Economic Update, as we did before, and the government is making sure that through its actions, it is making our economy grow to help Canadians in need.
I’m not sure if your answer indicates that you do agree with the projections of the Parliamentary Budget Officer or not, but I’ll proceed with my supplementary question.
With the current economic outlook and billions of dollars in spending in the supply bills that we have just received today, what are the overall plans to keep us on a healthy economic course?
The government is working daily to keep us on a safe economic course, and the Prime Minister is committed to ensuring that we can diversify our economy, and that’s the best way to ensure that we have prosperity in the future.
We are in a geopolitical situation where our major partner is changing the way it is related to Canada, so we have to diversify our economy, and that’s what the government has committed to do.
