Trudeau defends his economic track record as new data shows GDP contracted last quarter

Prime Minister Justin Trudeau defended his government’s economic performance Thursday by touting investments in housing and dental care when asked about new data that shows the economy actually contracted in the last quarter.

Statistics Canada reported this morning that the Canadian economy shrank at an annualized pace of 1.1 per cent in the third quarter — a performance much worse than what some forecasters expected for the July through September period.

In October, the Bank of Canada forecast that the economy would actually grow by roughly 0.8 per cent in that quarter.

Finance Minister Chrystia Freeland’s fall economic statement, tabled last week, cited a September survey of private sector economists projecting the economy would grow at least a little in the third quarter. The weak economic performance could undermine that document’s fiscal projections.

The new StatsCan data suggests the economy is underperforming even the relatively pessimistic growth projections from the central bank and others.

The slump was driven in part by reduced exports, including a steep decline in refined petroleum energy products, StatsCan said.

The U.S. GDP grew by 5.2 per cent in the same period.

Conservative Leader Pierre Poilievre pounced on the poor data, saying Trudeau has “led the economy into a ditch.”

The negative economic growth comes after the Bank of Canada went on an aggressive rate-hiking campaign to drive down red-hot inflation.

The intended effect of this effort — an economic slowdown to restore price stability — appears to be panning out.

“We know that Canadians are facing challenging times and have for a long stretch now,” Trudeau said.

“That’s why we’ve been stepping up with direct supports for Canadians,” he said, citing past GST rebates and rental relief for low-income Canadians.

Trudeau said Ottawa would push ahead with a housing accelerator fund, a program that floats money to cities that cut building-related red tape to get more units built.

He said the government would come through with more low-cost loans for homebuilders to get affordable rental homes built to help deal with the country’s acute housing crunch.

He also said the federal dental care program for children, and a forthcoming expansion of rhe program for eligible seniors, will save families money when…