The parliamentary budget officer says the Canadian economy is doing even worse than published figures would suggest.

Kevin Page says in a new assessment of the economy that last quarter's 3.4 per cent contraction in gross domestic product doesn't begin to reflect how far Canada's performance has fallen.

He says a better indicator is gross domestic income, which measures Canadians' purchasing power. That shows a plunge of 15.3 per cent in the fourth quarter over the previous three months. The sharp drop was primarily driven by the decline in corporate profits as a result of the crash in world commodity prices.

The report notes that the drop is far worse than the 1.5 per cent contraction in the U.S. during the same period.

The report undermines somewhat Prime Minister Stephen Harper's relatively rosy analysis Tuesday that Canada was doing significantly better than its competitors.

Finance Minister Jim Flaherty pointed to an International Monetary Fund report that said Canada is better placed than many countries to weather the worldwide recession.

"We have the strongest fiscal fundamentals in the G7," he said. "We have paid down debt, we're not creating a long-term permanent deficit ... [and] that leads us late into the recession and early out of the recession."