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Traffic idles in downtown Toronto. Many Canadians don’t want to concede that their lives have stalled, yet they know they have, writes John Turley-Ewart.Sammy Kogan/The Globe and Mail
John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian.
Canada’s economy has stalled. The engine that drives our fortunes, our gross domestic product (a measure of the market value of all we produce), has been sputtering for months, and the dashboard is flashing red.
New Statistics Canada data show real GDP contracted 0.1 per cent between January and March. It shrunk the previous quarter as well. Yet the Bank of Canada counsels caution before concluding we face a recession. Senior deputy governor Carolyn Rogers suggests not to “put too much weight on any one indicator.” Still, Canadian households see it as one of many troubling indicators.
They feel the weight of incomes that don’t go as far as they need to. High mortgage payments that leave little or no money for savings. Making minimum credit card payments, missing a car payment, having to make a trip to a food bank. Many Canadians don’t want to concede that their lives have stalled, yet they know they have.
It is so talked about now that it has become cliché to point out that the price of housing in Canada has delayed the hopes of new home buyers. Today those buyers are typically approaching 40 years of age. Two decades ago they were in the later 20s.
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Those between 15 and 24, seeking their first part-time jobs and their first full-time work, are languishing without a footing in Canada’s job market. According to Statscan, unemployment exceeds 13 per cent for their age group.
Concerning too is a growing despondency in the Canadian work force as the state of the economy is stalling careers, income growth and new business development.
The precipitous decline in the number of Canadians willing to create a career of their own making, to start businesses and create employment for others, is one indicator. Charles Lammam, a public policy professional with a flair for economics, has drawn attention to it. Since 2005 the number of self-employed with paid employees has fallen by 18 per cent.
He goes on to observe that the rate at which Canadians started new businesses between 2015 and 2024 was stagnant. In contrast, new business creation rose by 34 per cent in the United States, 40 per cent in Britain and 86 per cent in France. It’s not that Canadian entrepreneurs are going out of business, it’s that so many are deciding not to even try to start a new business.
If there is light in the darkness, it broke through in last week’s jobs numbers that saw roughly 88,000 jobs created in May. But hopeful signs are not a trend.
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In 2024, Statscan published a study that measured the career momentum of the work force – the confidence among workers that it is possible to grab a higher rung on the career ladder and meaningfully pull up their careers and standard of living.
About 40 per cent of Canadian employees from all demographics, 15 to 69 years of age, believed they were in jobs that didn’t offer good prospects for career advancement. More than 30 per cent in their peak career-building years – 25- to 44-year-olds – felt the same.
It’s hardly shocking to learn the study concluded that “occupations offering good career prospects also tend to offer higher wages.” Canada’s economy isn’t generating enough high-paying jobs and hasn’t been for a decade, reducing the career prospects of many in turn.
Many Canadian workers, white and blue collar, see promotions, meaningful raises and the financial relief they offer as out of reach. The long-term real GDP-per-capita trend from Statistics Canada makes clear we have been sitting in neutral since 2017. The cumulative impact has robbed every Canadian of about $4,200 in income a year today.
Prime Minister Mark Carney says the recent GDP numbers point to a weakness in the economy. Perhaps many of us blame U.S. President Donald Trump and his relentless campaign to tack tariffs of various sorts on the goods Canadians export to the U.S.
The Leader of the Opposition, Pierre Poilievre, argues the GDP data are proof of a recession, one that he blames Mr. Carney for.
A better read of the data than that of Mr. Poilievre and Mr. Carney comes from TD Economics: “Our forecast calls for a sizable slowdown in consumer spending and job losses in the U.S. and Canada, and a prolonged period of sub-trend economic growth. Even if this isn’t a recession, this period will still be painful to those who lose their jobs.”
It will be painful for those who keep their jobs too.
