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FIRST READING: Carney was elected to save the economy. It's only gotten worse

Lost jobs, stagnated productivity, and Mexico now claims the title as the largest U.S. trading partner

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FIRST READING: Carney was elected to save the economy. It's only gotten worse Back to video

When Mark Carney was sworn in as prime minister one year ago, the chief promise of his leadership is that the economy would begin to improve. The stagnation that marked the tenure of his predecessor, Justin Trudeau, was over, and Canada would now be managed by the steady hand of a former central banker. 

Instead, the Canadian economy has ended up being one of the most conspicuous weaknesses of the Carney government. While the Prime Minister’s Office can point to small victories in curbing immigration or increasing military recruitment, many of Canada’s most important economic vital signs are either stagnant, or in decline.     

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Below, a cursory list of everything that’s gotten worse under Carney’s tenure.

Carney’s entire premiership has been marked by high unemployment

On Friday, Statistics Canada released figures showing that the Canadian economy had shed 84,000 jobs in February, after a January that had already seen the evaporation of an addition 24,000 jobs.

All told, it’s the worst job loss since the COVID era, and confirms Canada’s position as second only to France in terms of overall unemployment rate. Canadian unemployment now stands at 6.7 per cent, as opposed to 5.2 per cent in the U.K., 5.8 per cent across the European Union and 4.4 per cent in the U.S.

In addressing the jobs figures on Friday, Carney claimed that 80,000 “net” jobs had been created under his tenure, and noted that the unemployment rate was lower than when he took office. It was at 6.8 per cent when he was sworn in last March, and is now at 6.7 per cent. Statistics Canada referred to the new rate as “virtually unchanged from 12 months earlier.”

Carney’s entire tenure has been marked by these kinds of unemployment figures. Without accounting for the job losses of the COVID era, every single month of the Carney government has seen unemployment rates higher than at any point since 2016.

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And the figures get even worse when looking at private sector employment. Carney’s time as prime minister has seen the raw number of non-government jobs go down. There were 13.49 million private sector jobs when he took the helm. Now there are 13.48 million.

In all of this, youth workers have been hit hardest, with youth unemployment now standing at 14.1 per cent.

But even that figure doesn’t account for the tens of thousands of young Canadians who have simply given up looking for work, thus officially removing them from the “labour force.” A recent tally by analyst Richard Dias noted if all these “inactive” youth are counted, Canada’s youth unemployment rate surges to nearly 18 per cent; a high not seen since the 1990s.

Productivity remains stagnant (even as it soars in the U.S.)

Productivity refers to how much GDP is being generated per worker. And in Canada, the story of the last decade is that with each passing year, the average worker is producing just a bit less wealth than they were the year before. The only reason this hasn’t resulted in 10 years of constant recession is because Canada has been juicing its GDP with immigration-driven population growth.

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Carney has brought this up several times. He gave a May speech identifying “weak productivity” as one of the singular drains on Canadian quality of life. And his November budget included a tax credit dubbed the Productivity Super-Deduction.

But according to figures tabulated last month by Desjardins, the best that can be said of productivity under Carney is that it remains flat. The Bank of Canada’s January Monetary Policy Report would conclude much the same. Even if Canadian GDP had been able to post growth of 1.7 per cent last year, the average Canadians’ experience of it was “essentially flat.”

Where this trend is made all the more noticeable is that it is continuing to not happen in the U.S. For much of the latter half of the 20th century, Canadian per capita GDP was not only the same as in the U.S., but it grew at the same rate.

Starting in 2013, the Americans continued on their upward productivity trajectory, while Canadians dropped into the doldrums we know today. And the 12 months of the Carney government have been no exception to this trend. In just the last nine months of 2025, the average American saw their share of the GDP rise by about $750, against the $0 seen by the average Canadian.

One of the main drivers of Canadian productivity stagnancy is that industrial investment has dropped off a cliff. A worker with a backhoe is obviously much more productive than a worker with a shovel, and the last decade has been subject to a rapid deindustrialization of the Canadian economy.

One particularly dramatic chart published last year by the National Bank of Canada shows “investment in industrial machinery” plummeting to generational lows in the first quarter of 2025, despite the exact opposite happening in the U.S.

“Canadian businesses today operate with less machinery and equipment than they did 10 years ago,” reads a January analysis published in The Hub. “We are not just failing to modernize. In some sectors, we are de-capitalizing.”

Mexico, not Canada, is now the United States’ most important trade partner

Carney’s signature promise upon taking the helm was that he would be able to restore relations with the United States, and bring a resolution to U.S. President Donald Trump’s tariff war against Canada. “I know the president, I’ve dealt with the president in the past in my previous roles when he was in his first term, and I know how to negotiate,” Carney said during a February debate for the Liberal leadership.

And according to polls, that’s primarily what drove his victory. Among voters who supported Carney, they primarily did so under the belief that he would manage the Americans better than Conservative Leader Pierre Poilievre.

Twelve months later, that trade war continues, and Carney has mostly overseen the slow deterioration of Canada’s U.S. export trade.

Meanwhile, Mexico — a country that often shared billing with Canada in Trump’s various trade threats — is counterintuitively strengthening its U.S. trade ties. So much so, that Canada can no longer claim the title as the United States’ largest trade partner.

Mexico is now the largest exporter to the U.S., and the largest importer of U.S. goods. The latter title breaking a Canadian record that stretches back as far as the Second World War.

And according to a writeup by the Wall Street Journal’s Paul Vieira, this might be very specifically a consequence of Carney government trade policy.

“Trump administration officials credit Mexico for taking a pragmatic approach on trade talks, while describing negotiations with Canada as challenging,” he wrote.

First Reading is a Canadian politics newsletter curated by the National Post’s own Tristin Hopper. To get an early version sent directly to your inbox, sign up here.

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