Beyond the Recession – Inside Canada’s Economic Decay

Canada recently slipped into a technical recession after enduring back-to-back quarters of negative GDP growth. Prime Minister Mark Carney shrugged it off, his friends at the CBC dismissed it, and Liberal voters ignored the dreaded “R” word. Everyone insists the outlook is rosy. Conservatives pounced on the data, arguing that Carneynomics is not working. The far-left New Democrats spent their time complaining about American annexation. Meanwhile, one top economist says they are all wrong.

Recession Games

It has been a rough start to Prime Minister Carney’s tenure. The Canadian economy has suffered three quarters of contraction, the unemployment rate is close to 7%, job creation has leaned heavily toward the public sector, and food inflation has accelerated.

But this is not anything new. And that’s why the Conservatives relying on recession talk is not a winning strategy, says Fergus Hodgson, senior director of Econ Americas and author of Financial Sovereignty for Canadians.

First-quarter GDP was negative 0.1%, and the fourth quarter was revised down to negative 1%. So, the numbers were narrow and are likely to be revised upward in the next Statistics Canada report.

“This is all just silly,” Hodgson said in a recent episode of Liberty Nation’s Liberty Road. “These GDP numbers are the total gross domestic product, not the per capita. So, of course, Canada has really been – on a per capita basis – stuck for the last 20 years. It’s basically had on and off recessions for 20 years.”

Canada has experienced a lost decade. One year prior to Trudeaumania, the GDP per capita was just below $51,000, about double from the turn of the century. When Justin “The Budget Will Balance Itself” Trudeau left Ottawa, it stood at around $54,000.

But it is more than just stagnation in the GDP numbers. A wide array of metrics – business investment, capital formation, entrepreneurship, and more – show the same drop or flatlining during the Trudeau years. The only upward movement in the charts has been in home prices and the number of newcomers.

Economists will attribute this lack of growth to a broad array of policies, such as the consumer and industrial carbon tax or the federal government’s disastrous immigration pursuits. And, no, President Donald Trump cannot be the fall guy for Canada’s economic woes.

Recent data suggest that Carney is not performing any better, either. For example, the former central bank governor vowed to build and invest in everything from pipelines to homes. In April, the value of building permits declined by almost 8%. No pipelines have been constructed. Carney has yet to even remove interprovincial trade barriers, a key promise from the 2025 election campaign.

“And here we are discussing this technical recession for the last quarters, which really is just the icing on the cake of a terrible economic scenario going back two decades,” Hodgson said.

Could this be what helps Alberta separatists achieve their aim of waving goodbye to Canada?

USMCA

President Trump dropped a bombshell when speaking to reporters at the Oval Office on June 10. He revealed that he is “not looking to renew” the USMCA when it comes up for a review on July 1. The post-NAFTA deal does not expire until 2036, but the trade agreement allows the United States, Canada, or Mexico to withdraw by providing a six-month notice.

“USMCA did one thing that I loved. After six years, it comes up for renewal. I don’t know that I’m going to renew it,” he said. “It was a great deal for one reason: it gave the right to terminate,” the president continued. “It was very important that we be able to do that. So we’re talking to them. We’ll see if we do something.”

According to Trump, neither Canada nor Mexico has anything to offer the United States. Is it true?

First, Canada exports a lot of cheap and subsidized lumber south of the border. Second, the Great White North ships plenty of crude oil. Whether these are competitive advantages in a Trump-led world is up for debate, especially considering the United States has 300 billion barrels of oil in its backyard.

As for Mexico, the current administration wants to do much of what Mexico does domestically, from automobile manufacturing to petroleum refining.

Perhaps it is a case of Canada and Mexico needing the world’s largest economy much more than the United States needs its neighbors to the north and south.

Fans Love Carneynomics

Canadians, however, are enamored with Prime Minister Carney. Well, older voters, specifically. The latest Angus Reid Institute suggests that almost 50% of men over 55 would vote for the Liberals in the next election, and more than half of women 55-plus plan to support the Grits. The numbers are notably lower for everyone else. Overall, Carney’s approval rating is 55% and has been steadily declining since peaking at 63% in February.

The prime minister believes he can get Canada back on track by cozying up to Europe, pledging to Make America Great Again when he is down south, and embracing China. Ultimately, as long as Canadians continue to believe that Trump will annex the country at any moment, the Carney clan will still have the support of a vast swathe of voters.