It is not as it should be in Canada. Last week’s news had 42,000 jobs lost in August, unemployment at 6.4 per cent, and projections that the economy will slow in Q3 while inflation will rise. Recent news reported empty food bank shelves are a concern with usage across the country now at 2.2 million visits per month, job growth in Canada is the slowest outside of a recession, the current real estate correction is the largest in history, and the national debt is $1.3 trillion with the government projected to blow past its fiscal budget by billions again this year. And then there is the fact that the country lacks the pipelines and port facilities to expand our export markets, and the Carney government has rallied Canadians into a trade “war” with their American neighbours.
There is a litany of uncomfortable facts about the country’s economy and, disturbingly, Canadians are content to trudge on in a constant, delusional state of “vranyo” about Canada and its economic prospects. Yet, this is a fool’s game and cannot end well, just as Ayn Rand noted, “We can evade reality, but we cannot evade the consequences of evading reality.”
One uncomfortable fact for the Liberal government that was revealed by Bloomberg News this summer is that Mark Carney has had the worst first year of growth for a prime minister since 1963. With Carney in charge for a year, the Canadian economy has actually shrank. The global-banker-turned-prime minister is the first to achieve this dubious feat. In Justin Trudeau’s first year the economy grew 1.7 per cent real GDP, and in Stephen Harper’s first year it grew 1.4 per cent. It is evident now that changing leaders did not produce a change of fortune for the Liberals and their hapless, at times inept, management of the economy.
There are many signs that the Canadian economy is in trouble. Tom Czitron, investment strategist and global macro analyst wrote recently in the Epoch Times that key indicators of ordinary Canadian economic life are moving in the wrong direction and jeopardizing the standard of living. Here are three indicators Czitron highlighted:
- The house price-to-income ratio has skyrocketed: in the 1983–1989 era, a median Canadian home cost roughly three times the median household income and today it costs eight times that much.
- Canada grew at roughly 2.8 per cent GDP per capita in the 1980s recovery. That figure has declined in every subsequent era, reaching an almost negligible 0.3 per cent growth in 2020–2025.
- Canadians are working approximately 27 per cent more hours to cover median rent and 23 per cent more hours to cover food costs than they were just five years ago.
Trevor Tombe, economist at the University of Calgary, cites OECD data in a revealing piece he wrote in early August in The Hub that demonstrates just how badly Canada’s economy is falling behind its competitors. It is this international comparison that should alarm Canadians. Since the first quarter of 2025 (when Carney took office), as mentioned above, Canada’s real GDP shrunk by 0.1 per cent. It is the only industrialized country where the economy shrank – and there is no excuse blaming Canada’s ill fortunes with the Trump administration: Mexico’s economy grew 0.4 per cent. The OECD countries grew on average 1.7 per cent, and the G-7 nations grew on average 1.7 per cent. Australia grew 2.5 per cent. The American economy grew 2.7 per cent.
In another Epoch Times finance column, wealth advisor Bryan Brulotte focused on the signs of an ailing business environment in the country. He too cited OECD statistics, “Canadian workers produced approximately US$75 of economic output per hour worked in 2023, compared with US$97 in the United States. In other words, American workers generated almost 30 per cent more output for every hour worked.” Brulotte also pointed out that business investment per worker in Canada has fallen to only 85 per cent of its 2014 level. Over that same period, investment per worker increased on average in OECD countries by two per cent, but more striking is that it rose by 21 per cent in the U.S. and 13 per cent in Europe. When the business climate is stormy and dark, businesses do not have the confidence to re-invest. More troubling is that loss of confidence becomes a defeatist attitude – and this is seen in a Canadian Federation of Independent Business (CFIB) report published earlier this year. CFIB reports that more than half of small business owners surveyed (55 per cent) would recommend against starting a business in Canada right now.
How far has the Canadian economy fallen? The International Institute for Management Development measured the economies of countries and produced a comprehensive report, World Competitiveness Ranking, that puts Canada at 16th in size in the world and the greatest challenge it faces is the uncertainty caused by the trade dispute with the U.S. And in a recent EnergyNow editorial column, it is reported that Canada’s annual $2.5 trillion economy trails the economies of U.S., China, Germany, Japan, the U.K., India, France, Italy, Russia and Brazil. The editorial explores the reputational impact of the weakened Canadian economy and questions, “If the G-7 were created today, would Canada make the cut?”
Perhaps there is no greater sign of a failing economy than plant closures and the exodus of companies to a friendly business environment in the U.S.; it is unsettling. Last week, 425 workers in Temiscaming, Quebec learned that the Rayonier Advanced Materials (RYAM) complex will be closing immediately. The week before, Heico announced 140 workers laid off at its steel operations in Quebec. Interfor Corporation, one of the largest lumber companies in Canada, plans to shift most of its executive power from Burnaby, B.C. to Atlanta, Georgia. In April, Interfor paused production at two Northern Ontario sawmills, which employed 200 forestry jobs. Canfor closed its Fox Creek, Alberta sawmill and announced it will be closing its Northwood pulp mill in Prince George, B.C. before Christmas. There has been a rash of closures in Quebec: Acier Orford in Sherbrooke, South Shore Furniture of Sainte-Croix, and Bestar in Lac-Megantic. Ontario lost the Crown Royal bottling plant and 200 jobs in Amherstburg to Montgomery, Alabama. Taking a page from Brookfield Corp’s playbook to take advantage of better U.S. tax rules is Algonquin Power & Utilities Corp of Oakville, Ontario, which announced its plan to establish its headquarters in Chicago. Earlier this year, GFL Environmental Inc., Canada’s largest waste management company, moved its headquarters from Sault Ste Marie to Miami Beach, Florida.
There has also been ugly news in the Canadian auto sector, and the loss of tens of billions of dollars of economic activity is sending shockwaves through Ontario’s manufacturing heartland. Honda’s $15 billion EV complex in Alliston is indefinitely suspended. GM’s CAMI assembly plant in Ingersoll had its $2 billion refit for the BrightDrop electric van production shut down – with 1,000 jobs lost. The GM Oshawa plant lost a shift (1,200 jobs) to Fort Wayne, Indiana. Stellantis dumped its stake making EV batteries in Windsor. Hyundai just announced they are dropping $3.4 billion of investment into Canada, including plans for an Ontario truck factory. Ford’s Oakville facility scrapped its $1.8 billion EV plan and the union rumour is Ford is also considering moving tens of thousands of jobs south of the border. More recently, Stellantis put 2,200 workers out with its planned sale of its Brampton plant and move of Jeep production to Illinois. Umicore Loyalist’s $2.7 billion battery plant has been paused for two years now – and there was also the cancellation of the $7 billion mega battery facility planned in Northvolt in McMasterville and Saint-Basile-le-Grand, Quebec when the Swedish parent company went bankrupt.
Remarkably, all of this economic mayhem can get far more serious for Canadian businesses. Today, the most concerning economic danger for Canadians (though many seem oblivious to the pain it will inflict) is the Carney government’s withdrawal from trade negotiations with the U.S. The breakdown of trade talks will prove devastating if the negotiations do not resume. Trevor Tombe estimates the government’s counter-tariffs are going to cost Canadians at least $4 billion in the coming months. A Deloitte Canada report estimates that if CUSMA is lost, through the next 10 years Canada’s real GDP would fall by 1.6 per cent, or $402 billion, and the country would shed 1,630,000 jobs. Deloitte concludes, “The bottom line is a severe but not cataclysmic impact on Canada’s overall economy, although perhaps cataclysmic for some sectors.”
Economist Ian Lee of the Carleton University Sprott School of Business sees the ramifications of the failed trade talks as much more damaging. He has been on multiple news interviews in the past couple of weeks and in an Allan Small interview he stated, “The twin hammer of massive increase in bankruptcies and unemployment and massive increase in capital flight of businesses moving to the States will devastate – devastate – the Canadian economy. We are looking at a deep, deep recession, possibly even a depression if that comes to pass and we don’t have any kind of trade agreement with the United States. It is the worst, the most catastrophically terrible thing that could ever happen.” In a CBC News interview Lee was direct, “Step back and take a look at the big picture. Our economy will go into deep recession if we do not have any kind of a trade agreement with the U.S.”
Last word on the Canadian economy this week goes to Jerry Haar, a professor at Florida International University, who provided a frank assessment of the problem with Canada’s economy. (A foreign perspective is often the most insightful). Haar assessed, “The Canadian economy suffers from a lack of dynamism and excessive dependence on American markets.” He said the problem is not Washington, but rather Ottawa, “While the conflict may be widely perceived as a David vs. Goliath match, Canada has only itself to blame for its weakness and vulnerability in trade. The reason? Canada has failed for decades to take sweeping measures to improve competitiveness and diversify exports.”
With obvious challenges before the country’s economy, and so much at stake, it is time Canadians snapped out of their state of “vranyo” – uncomfortable as the facts may be.
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
