Canadian Households Just Entered A Lost Decade of Economic Growth

Canada’s economy went from boom to bust faster than anyone could anticipate. Statistics Canada (Stat Can) data shows slower-than-expected real gross domestic product (GDP) in Q1 2024, along with a downward revision for the previous report. Combined with the rapid population growth, this has led to a rapid decline in per-capita real GDP. In fact, Canada’s per-capita real GDP rolled back to 2014-levels, indicating the country is facing a lost decade of household progress. 

Canadian GDP Slower-Than-Expected, Gets Downward Revision

Canada’s economy is growing much slower than anticipated. Real GDP reported annualized growth of 1.7% in Q1 2024, smaller than analysts had anticipated. That was due in part to a downward revision of Q4 2023 to 0.1% for the quarter, a tenth of what had been originally reported.  

Canada’s Per Capita Recession Has Extended For Nearly 2 Years

The growth rate is still positive, but nowhere near where it should be for the rate of Canada’s population. “When measured against a still rapidly growing population, per-capita GDP declined for the sixth quarter out of the last seven,” says Nathan Janzen, assistant chief economist at RBC. 

In a research note to investors, he further noted a previously reported decline in per-capita GDP in Q1 2023 was revised to an increase, breaking the trend that goes back to Q3 2022.

Rising per-capita real GDP is indicative of rising real incomes, and advances in quality of life. The opposite is also true—a decline in per-capita GDP tends to mean a declining quality of life, as the same economic output is expected to carry more people. 

Canadians Are Facing A Lost Decade of Economic Growth

Canada’s drop in per-capita real GDP only occurred over a few quarters, but occurred so fast it wiped out an unimaginable amount of progress. The most recent quarter of per-capita real GDP is roughly the same level it was a decade ago. Canadians just experienced a lost decade, with all progress made in the first 8 years wiped out within the past two. 

Source: RBC. 

The sharp slowdown was largely expected after going all-in on credit-driven growth, such as residential investment and government-driven stimulus. It won’t be a short-period either, with experts warning it will last for decades. The slowdown currently happening is also while the economy is viewed as “healthy,” so buckle up. Things can get a little messy in the short-term. 

17 Comments

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  • Vince 1 month ago

    Lost decade with PP and his economic action plan of cut, cut,cut!!! LOL

    • Mortgage Guy 1 month ago

      Found the government employee that thinks a national decline in living standards is just about them.

      Did you wander onto the wrong side of the internet? Most of the people that have been commenting realize this is related to poor decisions related to forced credit growth at the expense of other areas in the economy. Have yet to see someone complain that the person who isn’t in charge of making decisions is the problem.

    • Ian Brown 1 month ago

      I know you’re being sarcastic but how do you justify the expansion of public service faster than the private market can make jobs? These jobs aren’t actually doing anything, virtually everything is being outsourced to private contractors.

      • Rohi 1 month ago

        Well, it’s Soviet (so called “socialism”) style economy.
        Expansion of public service usually means “hidden unemployment” – govs using it to “employ” people to shuffle papers/docs between tables/offices.

  • Trader Jim 1 month ago

    Rapid credit expansion followed by decades of repaying the growth? Frankly, this is shocking! (not)

    The government is making such a huge mistake by redirecting funds from investment, and the productivity companies provide, and redirecting it back into housing.

    Tax-free accounts that can only be used for housing are subsidies that all taxpayers need to pay to subsidize higher and higher home prices.

    • Ethan Wu 1 month ago

      Time to pay the piper! Or as old man Punwasi puts it, debt the realization of future productivity realized today. Productivity borrowed needs to be paid back.

    • qwerty 1 month ago

      Government investment has been entirely into businesses, with between 0.1 and 0.2% of our gdp going to affordable housing, which is the key factor in increasing home affordability, as most other countries have discovered, hence why they invest 0.5 to 1.5% of their gdp into affordable housing. There absolutely are problems with our government and the way it spends on housing, with the gentrification of everything towards expensive rentals for example, but it throws billions at massive companies constantly for anything. Profits are put before people, and that harms everyone besides the owning class. Liberals refuse to attack the large and malicious businesses, because they get massive bribes (“lobbying”) but unfortunately the exact same is true for the Conservatives. Doug Ford’s Ontario is a great example of how willing every politician from those two center right wing parties is to give businesses, especially foreign ones for some reason, the taxpayers money, our money

  • Jason Chau 1 month ago

    What I don’t like is they’re pretending this is the government people voted for, but in reality I’m a Liberal voter and none of their current decisions were a part of the stated plan. This is all some cooked up agenda from backrooms to line the pockets of mega funds and their billionaire owners.

    • qwerty 1 month ago

      Cut a liberal and a fascist bleeds… I have issues with conservatives absolutely, but at least they’re honest, they’ll say they wanna do something messed up, and then will do it. The answer lies in people who care, not companies who constantly nickle and dime.

  • RW 1 month ago

    This place is broken. It can be fixed, but judging by the fact everyone argues over whether broken is an accurate term instead of addressing any problems, I’m guessing it gets a lot worse before it gets better.

  • Ahmed 1 month ago

    I make 6-figures, can’t afford a house, and pay half my money to the government. But I’m just happy to contribute to government spending so they can pay for things like flying a N*ZI in for the government to honor.

  • Matt 1 month ago

    Ontario should buy more helicopters, so we can see the problem from the sky. All very important priorities while things collapse around us.

  • Yusef 1 month ago

    All of this wouldn’t be an issue if the gov wasn’t also calling small business owners “tax cheats” while literally hundreds of billions just go unaccounted for in the government.

    What’s the incentive to create productivity? Everyone should just be pumping more money into their house until the economy is just one big AirBNB.

  • Anthony J Hartnell 1 month ago

    Your comment about real gdp per capita is disingenuous at best as it obviously takes time for real gdp to be realized in a population that grows 3 times faster than the economy…..wait a year a watch that metric drastically reverse itself.

  • Rob Korchinski 1 month ago

    Unless Canada’s Liberal-NDP government reverses course on their economic policies and anti-business mindset, Canadians will become increasingly poor. If you are an entrepreneur or a highly skilled professional, you probably have better options than giving away half of your income to fund Adscam, CBC, foreign automakers, and rapidly growing government bureaucracy.

  • qwerty 1 month ago

    Capitalism is devolving back into Imperialism/Monarchy, with dynasties of families having more wealth and power than countries, and lowering living standards for the working class. History echoes itself, and the roaring 20s were pretty bad for workers, though the fight for labour rights did eventually succeed, and result in the livable jobs of the Boomer generation, which is an extremely important thing to learn about, in order to understand how to improve pay, work/life balance, so on and so forth. Fascists and business owners motives tend to align, as capitalism requires an exploited underclass to maximize profits, such as would be nicely provided by rendering an entire race of human illegal. Businesses view employees as a simple resource, and we need governments to step in to stop businesses from treating working class people unfair at every turn, and allow the humans without anything to get back on their feet, rather than criminalizing their existence. If you want a pro-capitalism viewpoint, there’s a book by a philosopher, Das Kapital, which outlines the failings of modern capitalism, and how to fix it, and make it a perfect capitalism, working for all humans.

  • Mark Bayly 1 month ago

    The most left wing country in the world Canada land is having economic problems. What a surprise You mean you can’t print money forever to pay for Cadillac social services for the whole planet .

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