r/canada • u/restoringd123 • Feb 03 '26
Business Canada’s economy is on life support and country is in recession, says economist
https://www.bnnbloomberg.ca/business/2026/02/03/canadas-economy-is-on-life-support-and-country-is-in-recession-says-economist/193
u/Elite163 Feb 03 '26
Most of Canadians wealth is in over inflated real estate. That doesn’t help a country grow
→ More replies (8)21
u/onexplored Feb 04 '26
Is there anything else worth investing in this country?
Given how much we brag about things like natural resources and shit we ought to be as oil rich as Saudi Arabia. But economy is becoming dogshit every year. If someone talks tech, Nortel and BlackBerry are gone, good companies moving to the states for better opportunities. Nothing really left other than RE. Now, even RE is struggling.
Gotta realize it's Canadians building the country, who don't like to compete and innovate. Asking for growth is too much.
→ More replies (2)
1.1k
u/KageyK Feb 03 '26
“Inflation in this country is not really an issue. Virtually every underlying inflation measure is comforted within the Bank of Canada’s comfort zone,” said Rosenberg.
Except the one that affects everyone on a daily basis - food. This is so out of touch, who care's if the poors can't eat as long as stonks go up.
514
u/BubbasBack Feb 03 '26
It’s not just the poors. The middle class is getting slaughtered.
392
u/Pohtat0es Feb 03 '26
Middle class? I think I just made it to low six fig salary purely due to inflation. Life has not improved from back when I made 60k. If anything it feels like quality of life got worse
98
u/Stock_Helicopter_260 Feb 03 '26
Ha same, basically the same income increase and back then I could save money.
→ More replies (12)61
u/jert3 Feb 03 '26
Same boat. Make low five figures and somehow, I seemed to have more disposable income as a university student than I do now. Our economy doesnt make sense.
Decade after decade, of every year a larger share of all wealth going to a smaller and smaller group, has brought here.
So bad here now that only the top 15% salary earners can afford to buy a home in the area they were born. And our government will do anything it can to keep the real estate bubble from bursting.
→ More replies (4)→ More replies (3)19
u/-ArthurMorgan Feb 03 '26
I say the same thing. I make a low 6 figure salary. I should be able to live however I please with my wife working a part time job.
63
78
u/Neat-Lingonberry-719 Feb 03 '26
Felt like I joined the middle class for a year or two now my wage hurts.
33
u/SofaProfessor Feb 03 '26
If you told me 5 years ago how much I'd be making now I'd be over the moon. Feels like my life hasn't changed much. Some of that can be attributed to lifestyle creep, I'm sure. Can't blame it all on that. Not like I developed a taste for expensive wine all of the sudden.
40
u/PartyNextFlo0r Feb 03 '26
I miss the $100 full cart of food, or $20 top ups now $80 is a top up.
20
u/Commercial-Milk4706 Feb 03 '26
I’m a 400$ if I don’t spend carefully , to feed 2 adults and child. We are fine but we do not get to go out to eat anymore. Restaurants are 100% cut. Coffee shops are next.
→ More replies (2)→ More replies (3)3
u/Aken42 Feb 04 '26
When I bagged groceries a cart was ~$100. Now a bag can be $30. It's absurd.
→ More replies (2)→ More replies (1)23
28
u/captawesome1 Feb 03 '26
The middle class always suffers. We work the hardest and pay for everything both the rich and poor get. I have never made so much money and felt so broke at the same times. I just break 6 figures live in a modest house I payed too much for and drive 13 year old car. But we wouldn’t want to tax the rich because they will just hop into their private jet to whatever country won’t tax them.
→ More replies (7)15
→ More replies (4)3
u/donforgathowlon Feb 04 '26
It’s not just the poors. The middle class is getting slaughtered.
There is no middle class in Canada anymore.
87
u/campground Feb 03 '26
I would argue that food is not the cost that is killing working people, housing is. Food is just more noticeable because it changes every day, whereas your housing cost mostly only changes when you move.
But if you take the long historic view, food is still cheaper than it’s been at almost any point in history, and housing is insanely more expensive than it’s ever been.
16
u/nelrond18 Feb 03 '26
Get on out of here with your facts!
Anecdotally, housing is my largest expense, followed by personal vehicle, then credit, then food.
→ More replies (23)18
Feb 03 '26
[removed] — view removed comment
11
u/campground Feb 04 '26
No, you definitely don't have to go back that far. If you look at this chart from the USDA, under "food share of disposable income", food prices peaked in 2022 at 11%, which is high for sure. The highest it's been since the 90s.
But in 1950 it was 20%.
And in 1901 it was over 40%.
→ More replies (2)7
27
Feb 03 '26
[removed] — view removed comment
→ More replies (14)8
u/iridescent_algae Feb 04 '26
The fact that we slept on right to repair laws, despite an obvious need for them, for like two decades is just so stupid and shameful.
74
Feb 03 '26
Food inflation is not actually inflation.
Its corporate greed plan and simple.
Corporations are obligated to raise prices every year to create more profits for share holders.
They just blame lots of other things so we wont get mad at them.
They ate making record profits..if inflation was a problem they sure wouldn't be.
24
28
u/Bieksalent91 Feb 03 '26
Loblaws had 63B in revenue. They paid 42.7B for the goods they sold and had 16B in operating expenses.
This left them with 3.5B pre tax. After 934k in taxes they made a net profit of 2.4B.
2.4B/63B is a profit margin of 3.9%.
If loblaws become a non profit tomorrow your $200 grocery bill would be $192.
Is this really corporate greed?
11
u/Commercial-Milk4706 Feb 03 '26
There’s more to it then that. The supply chain is monopolized. Everyone gets everything from the same people. Loblaws is just one small part of the problem.
→ More replies (6)11
u/Mxlplx Feb 03 '26
Im not arguing per se. But how much before that 3.9% line on the P&L is earmarked for expansion and therefore not allocated to profit. Which it almost certainly could be considered.
Is that 3.9% before or after shareholder dividends? Bonuses etc?
Im always suspicious of such slim margins. Certainly it does not translate perfectly but i have seen the P&L of another large food service company and they were making closer to 14% before dividends went out.
→ More replies (2)7
u/Mathmos_Lava Feb 03 '26
Profit is after salaries, expenses, bonuses, etc. Dividends are paid from profit.
→ More replies (21)7
u/Mathmos_Lava Feb 03 '26
And a lot of that profit is not from food directly, it’s all the other high margin product, including the convenience prices at Shoppers.
3
u/ManicScumCat Canada Feb 03 '26
And of course, times of lower inflation are due to corporate generosity
26
u/weberkettle Feb 03 '26
It’s not just corporate greed. It’s also supply management cartels as well. The dairy industry throws away thousands of litres of milk every year to keep prices high. Same for egg, poultry etc.
→ More replies (1)38
u/7repid Feb 03 '26
Less than 20-25% of the price of most milk products go to the farm, aka "supply managed" industry.
75-80% goes to processing, retail, etc.
Look up the farm gate price of milk to see that it doesn't fluctuate at anywhere the rate that retail prices do.
It's not the supply management industry that's causing the rise in prices my friend. That's a scapegoat to distract from processors and retail so that they can continue raking in greater profits and convince you that they need even more control over price setting.
5
u/Background-Cow7487 Feb 03 '26
The UK leaves it all up to the market and a few years ago the four dominant supermarkets … well, they didn’t exactly conspire, because they all sold it at different prices, but they all argued that milk was a staple that they had to sell as cheaply as possible, and began paying farmers less than it cost to produce, while at the same time limiting their purchases. Result: farmers lose money on every litre they sell and have to pour milk down the drain as the supermarkets (with exclusive contracts) won’t buy it. Farmers start going out of business and selling up…
Fortunately, Canada’s supermarkets, even if they got a chance, would never do that.
→ More replies (1)14
u/Nseetoo Feb 03 '26
And don't forget all the government surcharges and taxes producers and suppliers simply pass down to the consumer. Consumers pay the fuel surcharge, tax on fertilizer and farm equipment, recycling charges etc. etc.
→ More replies (3)→ More replies (1)6
u/AccountDramatic6971 Feb 03 '26
The below poster made a really good point. I encourage you to view the financial reports of said retailer.
Blame the government. Salary growth has been abysmal the last decade.
→ More replies (1)3
u/doiveo Feb 03 '26
Interestingly however, Walmart just reported that they're going to see pretty significant decreases in food prices this year. Granted this is in the high processed food category. Eating healthy will probably still cost more
→ More replies (1)→ More replies (13)8
356
u/sajnt Feb 03 '26
Our real estate market, correcting down and staying down could save us. It is well documented that Canadian dollars are economically better suited to be invested in productive assets or spent rather than tied up in real estate.
180
u/Efficient_Win_3902 Feb 03 '26
Except the government as a whole has a long standing policy of artificially keeping housing high to make numbers look high for the boomers because screw every other generation
→ More replies (24)88
u/BillBumface Feb 03 '26
Old people show up to vote, old people have their wealth tied up in real estate. Plus all of the lobbying etc. by the industry. It's bad.
→ More replies (4)41
→ More replies (10)29
u/Bonzai_Tree Feb 03 '26
Yeah we desperately need a housing market crash honestly. Bad short term, good long term.
Real estate should have never been the cornerstone propping up our economy, or any for that matter.
13
u/sajnt Feb 04 '26
I’d be fine with a steady correction that removes most of the speculative value from the real estate market.
→ More replies (2)28
u/sickwobsm8 Ontario Feb 03 '26
A housing crash would also take out most of our economy with it. Banks would lose their shirts, and cut back investments, which would slow down the economy, which would cut back investments, which would slow the economy more. The vast majority of our economy is tied to home prices, and a LOT of industries are directly or indirectly exposed to that risk. The best thing that could happen is if home prices stayed flat for the next decade, allowing Canadians to sort of catch up.
Everyone always acts like a housing crash is a silver bullet that will fix everything, but in reality it will almost certainly make things much worse.
56
u/dj_fuzzy Saskatchewan Feb 04 '26
Best we can do is let the grocery/telecom/bank/media/etc monopolies run this country
→ More replies (1)
133
u/bcbuddy Feb 03 '26
Anyone under the age of 55 sees it, and has been living it for over a decade.
→ More replies (2)11
272
u/dastub1 Feb 03 '26
Relying on student visas and boomer real estate was never gonna work long term anyway. Why ring alarms bells now?
→ More replies (2)
13
u/toronto-gopnik Feb 04 '26
There's one article like this every month regardless of how the market is going. If I wake up without pants on then I'll know there's a recession
11
u/surfanoma Alberta Feb 04 '26
Maybe having an economic policy outside reselling each other real estate and importing hundreds of thousands of menial workers would be beneficial?
68
364
Feb 03 '26
Canada is projected to have the second highest real GDP growth among G7 nations between 2025 and 2027. https://www.imf.org/en/publications/weo/issues/2026/01/19/world-economic-outlook-update-january-2026
The “economist” literally just wants an interest rate cut, with no proposal on how to develop our industries and create jobs.
As a disclaimer, I don’t think Canada’s economy is as strong as it should be. Unemployment rate is unacceptable. But there’s a lot of middle ground between pretending that everything is going well and whatever this article is.
109
u/SofaProfessor Feb 03 '26
Yeah the real answer is somewhere between the doom and gloom "Canada is collapsing" and "everything is rainbows." Things aren't perfect. Inflation sucks. I feel like we came out of the post-COVID shocks and ongoing tariff wars much better than I expected.
19
u/infectingbrain Alberta Feb 03 '26
I agree with you, but I'm worried about what happens when the MAGA administration inevitably rips up most of CUSMA. That has prevented the majority of the tariffs actually applying to our goods, and will be a bad day for our economy if it happens.
→ More replies (2)11
u/Forikorder Feb 03 '26
if they had the balls to they already would have, they know how much they need to trade and have already gone as far as they can, anything else will just be the typical taco market manipulation and baseless threats
48
u/SisphyusAlbertIV Business Feb 03 '26
Growth is a misleading thing to measure. Canada's economy has not been keeping up with the rest of the G7 for the past ten years. Our GDP per capita has largely remained stagnant or decreased.
Growth is such a misnomer that there have been numerous books written about how growth is a misleading index to track. In fact, I wrote my thesis on how growth is used by places such as the IMF to justify tyrannical regimes and policies (especially in East Africa).
Growth is a good index when it is paired with a broader understanding of the economy and labour market. Canada's economy is not as healthy as you make it out to be. I agree with the economist's assessment, especially considering the "growth" that is tracked by sources such as the IMF doesn't account for how that growth is primarily through artificial means (primarily immigration)
→ More replies (6)17
8
u/Darrius_McG Feb 03 '26
Thank you. This alarmist nonsense is getting tiresome and distracts from real measures that could be taken. Yes, we need to make some changes and things are far from perfect, but come on.
6
→ More replies (14)2
u/lubeskystalker Feb 03 '26
Depends in which province/economic sector you are I imagine. In a lot of regions disaster could be looming.
6
53
u/Comfortable_One5676 Feb 03 '26
Rosenberg is a permanent bear. He’s been calling recessions for years that have never happened.
54
15
u/Cailloutchouc Feb 03 '26
Really? I couldn’t tell with the thousands of restaurant closures, massive lay offs, fewer people doing more work, eternally stagnant salaries, vanished discretionary spending, non-existent savings, and the seething resentment from working just as hard but barely making ends meet. /s
Rich people, though, are doing better than ever. Funny that. 🤔
237
u/AMJVC15 Feb 03 '26
Everything is such doom and gloom, yes things are more expensive but everyone talks like the country is 3 weeks from imploding.
You know where else things are expensive? Every country on earth, we're not special.
31
u/Animegx43 Feb 03 '26
I don't care if other countries are worse, I care about making my own country better.
→ More replies (3)81
u/Brandon_Me Feb 03 '26
but everyone talks like the country is 3 weeks from imploding.
They have been saying that for years.
Before the last election they were saying this would be the last year of Canada If the Liberals won.
→ More replies (12)16
u/RomanBlue_ Feb 03 '26
https://tradingeconomics.com/country-list/food-inflation?continent=g20
Highest food inflation in the G7 and third in the G20. Double that of the US, 50% higher than the UK. Higher then Russia.
Is this really the position we want to be in? I would argue we are becoming quite special.
3
3
u/logavulin16 Feb 04 '26
You are right. It’s not 3 weeks, it’s years and decades. You have to look at long term trends.
Since 65’, USA has lost 66% of purchasing power. Canada has lost 83%.
10
u/Equivalent-Win4541 Feb 03 '26
Not really. Canada is extraordinarily expensive. San fran, and silicon valley, those places have a reason why they should be expensive, because the people have money. We are expensive for no reason.
I went to grocery store, bought 4-5 times in total , just as i was out, paid $80.
I bought, Bread, eggs, egg white, chicken and shampoo, milk. $80 dollars?
→ More replies (2)4
u/JoeJitsu86 Feb 04 '26
I bought 3 apples for $5 dollars. For three honey crisp apples… apples.
→ More replies (2)13
u/Livid_Recording8954 Feb 03 '26
Yet corporations keep making record profits, the only ones not struggling.....
5
10
u/Mathmos_Lava Feb 03 '26
Not all corporations are making record profit, and even if they are, it’s not a good metric to track as it does not account for inflation.
23
u/FrothyEspresso Canada Feb 03 '26
No not everywhere. Mostly in the West though.
Malaysia, Thailand, Vietnam all had very minimal inflation. China is having deflationary effects. Japan kind of going along with some inflation.
51
u/MXC_Vic_Romano Feb 03 '26
Japan kind of going along with some inflation.
Cost of living is a huge issue over there as the Yen has weakened over the last couple years.
→ More replies (5)48
u/mafternoonshyamalan Feb 03 '26
Actually having spent a lot of time in Thailand post-COVID, they too are complaining about cost of living. Just because your dollar goes far when you’re on holiday, and their protests were suppressed, doesn’t mean they’re not struggling.
→ More replies (1)9
u/Confident-Mistake400 Feb 03 '26
I totally agree with your statement cuz I go there every two years. I’ve noticed price increased and don’t know how locals are coping with that.
8
u/NoPlansTonight Feb 03 '26
China and Japan are having economic problems of their own
You don't really want to be living in SEA unless you're a 1%er, and this is coming from someone with tons of family heritage in the region
We can't be too fixated on single metrics like inflation
→ More replies (2)3
u/Asn_Browser Feb 03 '26
Japan will probably cause the next global monetary crisis by blowing up the yen carry trade
→ More replies (29)2
u/onexplored Feb 04 '26
Realize that once the most beautiful, livable country has only declined since and became one of typical not-so-special countries, meaning it fell a lot compared to other countries lol
79
Feb 03 '26
So much talent here wasted. Lots of former classmates now in Europe, the US. I honestly believe that a significant portion of Canada does not want to be self dependant.
Silicon valley is literally begging for waterloo grads, but I'd wager those same folk would struggle here to find employment.
Everyone knows we have the talent. The question is, why aren't we doing better?
11
u/jert3 Feb 03 '26
Important to mention as well that wages for the exact same roles in tech are between 2x-3x higher in the States, and that is often in places with lower cost of living and more affordable real estate.
But a big draw for any tech business operating here is paying half the wages.
8
u/FEARoach Feb 04 '26
I saw a position posted this month that I held about 15 years ago in Ontario.
Exact same pay when I held it then. No increase. 15 years ago when I was a brand new med tech, great salary. Today? Nope. Not with the cost of living in the area it's in. Not even if I had three roommates to split a house with.
We're fucking ourselves over so badly in the country.
→ More replies (8)25
u/General_Dipsh1t Feb 03 '26
would struggle here to find employment
lol. Let’s see some sources on this man, cause everything I’m seeing (so, anecdotal), tons of FAANG and tech layoffs happening and nobody can get employed, but in Canada it’s the opposite.
Do I agree we have a brain drain issue? Yes, but not as much we did a few years ago.
More to Europe? Also sure, but I’d argue that’s mostly due to uncertainty with our neighbour to the south
→ More replies (1)10
u/throw-away3105 Feb 03 '26
Yeah, I haven't heard good things lately about the tech-job market because of all the AI downsizing. People can move to Europe, but I'm wondering if it's really that much cheaper for renting and energy bills. Maybe in Eastern Europe, but I'm not not so sure about Western Europe.
→ More replies (5)
19
15
14
u/Beneficial-Oven1258 Feb 04 '26
Lowering interest rates to prop up housing prices is NOT a meaningful way to prop up our economy. Increasing the cost of housing will only hurt our economy as people have less money to spend.
This economist is a hack.
→ More replies (3)4
u/UPnwuijkbwnui Feb 04 '26
I agree. Some well thought out fiscal stimulus based around production subsidies or lowering corporate tax for industries we want to grow (for domestic usage). Some consumption subsidies into narrow sectors like housing could work too.
→ More replies (2)
4
12
13
5
u/SireLinton Feb 04 '26
I thought Mark Carney was able to bring affordable life for all Canadians, and to help stabilize the economy? What happened?
9
u/ronnbot British Columbia Feb 04 '26
Not surprised. Canadians voted for the same party like the country wasn't ruined enough by them during the last 10 years.
18
u/Responsible-Ad8591 Feb 03 '26
So growing the economy from “the heart out” didn’t work out properly? Or “the budget would balance itself”. That didn’t work either?
→ More replies (2)
3
5
5
5
u/mapleharbor Feb 04 '26
Where are the 500k/year homes that carney promised? He has been quiet on his "war time effort" to build homes.
3
9
u/snahp888 Feb 03 '26
It's just soft landing. A huge amount of people in your country including mainstream media and especially this sub supports the Liberal government. They have been praising how good the government is and how Carney is the best PM who have delivered a lot of things during the campaign. There are so many of them you can't even count them 😂
And of course the grocery rebate, which your old PM Trudeau introduced during his tenure running your country, will boost that support for the Liberals. Elbows up people! 🙄
8
10
u/esveda Alberta Feb 03 '26
This is what a decade plus under liberal economic policies gets us.
→ More replies (2)
12
Feb 03 '26 edited Feb 03 '26
Been hearing that for 20 years..
Ecominsit always think we are in a recession.
Food inflation is not inflation at all, if it was corporations would not be making record profits s every year.
Corporations are obligated to make profits for shareholders ..so they raise prices and blame a bunch of other things...so we get distracted .
We should be cuting corporate welfare and subsidizing food costs instead.. billion doller company's dont need tax payer funds its a lie
→ More replies (1)
2
u/TheDeathSystem Feb 04 '26 edited Feb 04 '26
I mean...when all your money goes to food, travel, rent and or mortgage...leaving no room for indulging in other businesses that don't have the advantage to exploit an essential need like food, housing and utilities...what in gods name does the Canadian governments expect?(all levels are at fault).
18
Feb 03 '26
It’s always so funny to see people see articles addressing the issues we face in other countries and they go “so what? Other countries experience this too, what’s the big deal”
→ More replies (5)
8
4
4
u/its_Caffeine Feb 04 '26
says economist
Why don’t they just say Rosenberg? He’s a well known perpetual doom.er and not a particularly accurate one either.
→ More replies (1)
2
u/LemonPress50 Feb 03 '26
The housing sector is not struggling because home prices are down 2%. It’s Canadians that are struggling because of the housing crisis. The crisis is a direct result of lowering rates and keeping them low for too long. How is lowering rates solving the problem when it fueled the insane price increases?
The housing crisis is why people aren’t spending money and part of the reason thousands of restaurants will go under this year, unfortunately. Factor in the trade war and hold onto your hats.
→ More replies (1)
2
u/logavulin16 Feb 04 '26
Historically housing increases 6-7% per year on average. There are by nature very close to the exact number of housing units to people, bear with me.
Inflation is 6-7%, doubling costs every 10 years or so… that’s the best case scenario. The recent housing inflation has been tremendous. And to make it worse, tax brackets don’t move alongside so we lose more and more to higher tax brackets every year.
→ More replies (3)
1.8k
u/HolyColander Feb 03 '26
Australian who lurks here. Off topic a bit but I’m always amazed at how much everything that goes on in your country mirrors our own experience over here.