Canada’s economy beat expectations but dive into the details before celebrating. Statistics Canada (Stat Can) data shows real gross domestic product (GDP) grew faster-than-expected in May. However, even with a rapid public sector expansion driving half the advance, it failed to meet population growth. As a result, Canada’s GDP per capita recession printed an 8th consecutive quarter of losses.
Canada’s Real GDP Grew Much Faster Than Forecast
First, the good news—Canada’s real GDP advanced much faster than analysts anticipated. Real GDP grew 0.16% in May, around half the pace seen in April. The monthly advance was significantly larger than Stat Can’s preliminary estimate of 0.1%, coincidentally the same forecast for the upcoming June report.
If correct, the country’s output will be growing even faster than the Bank of Canada (BoC) had forecast. At least when it comes to aggregate growth.
Stat Can’s estimate shows that 15 out of the 20 major sectors expanded in May. Splitting it into the major categories, the smaller Goods (+0.4%) sectors grew much faster than Services (+0.1%). The slowing of the latter is worth emphasizing since it has been driving lofty wage growth, a concern the BoC has expressed.
Canada’s Rapid Public Sector Expansion Fueled Half of GDP Growth
The growth surprise was almost exclusively driven by public sector expansion. Public sector real GDP expanded 0.4% in May, double the rate of the general economy. It was the fifth consecutive month to advance, driven by local, municipal and regional administration.
It’s worth emphasizing just how fast this area is growing. It provided 49% of real GDP growth in the month, an issue often seen in a recession economy. We might not be that far off.
Canadian GDP Per Capita Recession Goes Into An 8th Quarter
Canada’s growth is failing to keep up with the pace of its population, and it’s getting worse. “Indeed, on a per capita basis, GDP declined by 1.0% in the second quarter,” explains Matthieu Arseneau, deputy chief economist at National Bank.
Canada’s Real GDP Per Capita Recession Continues For 8th Quarter
Annualized quarterly growth for real GDP in aggregate and per capita. June estimate included for Q2 2024.
Source: NBF Economics.
The Big Six economist warns that if June’s estimate is confirmed, it would mark the 8th consecutive quarter per capita GDP declined. He further notes that most sectors now look “overstaffed,” setting up the labor market for further weakness.
Trudeau will soon start handing out instant Canadian citizenship vouchers in cereal boxes all over the world.
More government = more debt = higher taxes = more control = less freedom….real easy to see….poor Canada….what a mess…
Liberals need to go for good. Period.
I find these numbers hard to believe. Stellantis auto plant in Brampton, ON has been idle since the end of 2023 and Ford Oakville Assembly plant went idle the 1st week of May for an extended retool. Zero vehicles being exported from those to plants is a massive hit to GDP.
Public sector workers are a net loss to the economy. As they are paid with tax dollars they contribute NOTHING. Overpaid underworked tools that’s the public sector workers. Always holding us hostage as well when they cry for morew money!
Dumbasses in government do it to themselves every time.
Watch them all go broke as Conservatives get elected and boot their asses out of jobs.
So the cost of govt in Canada has risen to the point that is completely unsustainable. Consider the cost of the federal govt in 2023 was 500B, which is roughly 25% of our gdp?!? Provincial and municipal spending was another 600B? That means in 2023 almost half of our gdp was from govt spending?
In terms of total govt debt, we are over 3.3Tr, or 123% of gdp? The feds are at 1.7tr, while On and qc are almost at 1Tr? In terms of total public debt to gdp we are behind Japan and Italy? Japan being a special case where unfunded pension liabilities are added to the total, and Italy is only slightly higher.
The problem is this is happening rapidly. If we continue like this we will soon be second? And for consumers it’s even worse. We have the highest consumer debt to gdp in the g7, by far, and are now chasing Switzerland for the worst in the world? So obviously the Trudeau ‘plan’ devolved quickly into govt debt like his dim wit father. So much so that by 1993, the wsj called Canada a 3rd world country? It wasn’t till 2007 that we finally got past jt’s dad’s mess. So apparently both thought that govt should somehow be the main industry in Canada, despite producing nothing of value? The sad part is programs like pharmacare, dental care and GIB FOULD HAVE BEEN BENEFICIAL TO US, but these idiots blew all the money on corruption, scams and corporate welfare.