4 ms·

Canada in Technical Recession

68 points by efavdb 4mo ago

Pet_Ant 4mo ago
Considering all of Trump’s shenanigans it’s impressive it’s just that. With Hormuz, tariffs, and America first, this is the equivalent of a fender dent after spinning out on black ice.
- s3graham 4mo ago
  We are of course still spinning, so I'm not overly confident we haven't just glanced off a guardrail on the way to the ditch (to belabour your analogy).
- MichaelZuo 4mo ago
  Well population grew significantly so it’s a bigger decline in per capita terms. Notably this was even though AI systems got decent enough, supposedly, to do simple tasks and answer simple questions correctly.
  - bryanlarsen 4mo ago
    That's not true. The population shrunk in the first quarter, so the GDP actually grew by 0.2% on a per capita basis.
    - MichaelZuo 4mo ago
      Oh yes once you include non permanent residents the total number has gone down.
- alephnerd 4mo ago
  Even without Trump, US-Canada trade was on track to hit choppy waters. Even in the Biden admin (whose alums would have ended up in a Harris admin) there was an openness to armtwist Canada [0] into acquiescing [1]. China did the same [2] with Canada [3][4] until they acquiesced [5]. Heck, even the EU has been slowrolling the ratification of the EU-Canada CETA [6] to protect their (primarily French and Italian) industry. Sadly, it's difficult for a country that is Canada's size to push back when faced against these sized economies. [0] - https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/august/united-states-requests-usmca-dispute-settlement-consultations-canadas-digital-services-tax https://ustr.gov/about-us/policy-offices/press-office/press-... [1] - https://www.canada.ca/en/department-finance/news/2025/06/canada-rescinds-digital-services-tax-to-advance-broader-trade-negotiations-with-the-united-states.html https://www.canada.ca/en/department-finance/news/2025/06/can... [2] - https://www.reuters.com/markets/commodities/china-commerce-ministry-begins-anti-dumping-investigation-into-canadian-canola-2024-09-09/ https://www.reuters.com/markets/commodities/china-commerce-m... [3] - https://www.reuters.com/business/autos-transportation/trudeau-says-canada-impose-100-tariff-chinese-evs-2024-08-26/ https://www.reuters.com/business/autos-transportation/trudea... [4] - https://www.reuters.com/world/china-tells-canada-it-should-cancel-tariffs-chinese-products-2024-11-15/ https://www.reuters.com/world/china-tells-canada-it-should-c... [5] - https://www.reuters.com/world/china/canada-china-set-make-historic-gains-new-partnership-says-carney-2026-01-16/ https://www.reuters.com/world/china/canada-china-set-make-hi... [6] - https://carleton.ca/tradenetwork/research-publications/ceta-ratification-tracker/ https://carleton.ca/tradenetwork/research-publications/ceta-...
- napierzaza 4mo ago
  [dead]
- rayiner 4mo ago
  What’s funny is that Q1 per capita GDP growth in the U.S. was about 1.4% annualized (within the normal range) while Canada was only at 0.1%. Trump is the bull in the china shop but it’s not his China he’s breaking.
  - alephnerd 4mo ago
    Much of the capex that was invested thanks to IRA and CHIPS subsidizes is starting to go operational and trade barriers enacted during both Trump 1 and the Biden admin remain in action, so it wasn't that surprising that much of the output that was unlocked from that era is continuing. That said, tariffs and trade barriers did help. Heck, I'm a Dem but even I argued that we needed to build trade and non-trade barriers to protect capex that was unlocked via industrial policy.
    - rayiner 4mo ago
      I think Biden was an industrial policy guy at heart and it’s a shame he was so old by the time he got a chance to execute on his ideas.
      - alephnerd 4mo ago
        Yep. That said, much of the stimulus and industrial support packages that were pushed thru in the Obama admin were thanks to the political cover Biden provided as Veep - he was Obama's senate whisperer. That said, industrial policy has bipartisan support at this point now. As you know working DC BigLaw, professional networks are stronger than partisan biases.
- bawolff 4mo ago
  Given canada has so much oil,is the hormuz situation really a net negative for canada ecconomically? Like obviously its terrible in general, but id expect higher oil prices to help starve off a recesion.
  - shigawire 4mo ago
    Global market for oil. If the oil intensity of your economy is high, higher oil prices impacting all goods/services will outweigh increased oilel revenues.
    - sfifs 4mo ago
      Only if you insist on passing on global prices into your domestic economy. Not doing this is very difficult if you're a net importer but very much possible if you're a producer. This "leaves money on the table" but it is very much a choice (with different consequences), just one that rarely occurs to people who have grown up in highly capitalist economies. This is also why historically companies have preferred being vertically integrated to avoid having their supply chains exposed until American economists and brokerages started pushing the cult of specialization. Outside of the US, big conglomerates still operate this way.
      - gucci-on-fleek 4mo ago
        > Only if you insist on passing on global prices into your domestic economy. Not doing this is very difficult if you're a net importer but very much possible if you're a producer. This "leaves money on the table" but it is very much a choice (with different consequences), just one that rarely occurs to people who have grown up in highly capitalist economies. They tried this before [0], and calling it controversial would be an understatement. Probably not a great idea to try it again right before the Alberta succession referendum [1]. [0]: https://en.wikipedia.org/wiki/National_Energy_Program https://en.wikipedia.org/wiki/National_Energy_Program [1]: https://www.cbc.ca/news/canada/edmonton/alberta-separation-referendum-televised-address-9.7208162 https://www.cbc.ca/news/canada/edmonton/alberta-separation-r...
  - 4mo ago
- deleted 4mo ago
  [deleted]
Ava234 4mo ago
[dead]
clickety_clack 4mo ago
I’m surprised it’s taken this long to get here. Talking to a few friends up there, the country has been feeling economically depressed for the last couple of years.
- alephnerd 4mo ago
  The formal and traditional definition of a recession means a regression in GDP growth. Economic malaise is orthogonal to the technical definition of a recession, though it is often correlated. And conversely, economic growth isn't always correlated with positive feelings (eg. South Korea and Canada in the 2010s)
  - mcmcmc 4mo ago
    This is not really true. Consumer confidence has a direct impact on GDP in terms of consumption. Lower confidence = lower consumption. Other components of GDP (Investment, Government spending, Net exports) can increase at the same time which can result in no net change, or even positive growth despite decreases in consumer spending. But saying consumer confidence (ie consumption) has no correlation with GDP is incorrect. This is basic macroeconomics. https://www.investopedia.com/articles/fundamental/103002.asp https://www.investopedia.com/articles/fundamental/103002.asp
- deleted 4mo ago
  [deleted]
- windexh8er 4mo ago
  I don't think this is dissimilar to the US to be honest. We just happen to have inflated and questionable revenue being reported at levels that gloss over the true underpinnings of the economy. I think this may be a leading indicator. I really liked how Cory Doctorow framed what Canada could be doing with respect to digital sovereignty in his book ("Enshittification"). Doctorow argues that if Canada repealed its anti-circumvention law (Bill C-11), Canadian companies could legally jailbreak American tech products (John Deere tractors, the Apple App Store, etc) and sell those fixes worldwide, turning the right to tinker into a massive export industry and a form of digital sovereignty. One can dream.
bawolff 4mo ago
I wonder to what extent the clamp down on immigration is related to this. Feels like a factor that gets lost with everyone blaming trump (which dont get me wrong, he deserves)
- alephnerd 4mo ago
  > I wonder to what extent the clamp down on immigration is related to this It doesn't hurt but it doesn't really help either. According to a buddy of mine from my policy days, GAC has always known there were issues with how immigration was managed in Canada but their diplomatic posts tend to severely lack intel and law enforcement attaches unlike most other foreign services, which made background checking difficult. There was also a recognition internally that the kinds of immigrants Canada wanted would be poached via an O-1 anyhow, so there was a perverse incentive around how skilled immigration was managed. And add to that the fact that the provinces themselves also managed immigration to a certain degree. All that led to a bureaucratic breakdown. Additionally, when even Canadian policymakers are actively targeting American finance, VC, and lobbying jobs (like my friend), it shows you that there are deeper, fundamental issues. Heck, Carney only came back to Canada because his door to 10 Downing Street was effectively shut due to BoJo.
- slopinthebag 4mo ago
  Yes, Canada has been in a recession for years if you used per-capita GDP, high immigration masked this.
  - bryanlarsen 4mo ago
    And this quarter is the opposite. per-capita GDP growth was positive 0.2%.
    - slopinthebag 4mo ago
      Yes because of Alberta and oil due to the ongoing crisis. Single handedly carrying the Canadian economy rn.
usrnm 4mo ago
I have zero knowledge of economics, so maybe someone can help me with the question that's been bothering me lately. Why is being in recession or not decided based on figures not adjusted for inflation? I mean, a large part of Europe is technically not in recession, but growing at a rate that's much lower than inflation is no real growth at all, is it? How does it work?
- transdev12 4mo ago
  Real GDP is adjusted for inflation, nominal GDP is not. Being in recession is typically defined as negative gdp growth. So to answer your question, being in recession does account for inflation.
- dimes 4mo ago
  “Real GDP” accounts for inflation already.
- josefritzishere 4mo ago
  Economics is not a science but it sure likes to pretend that it is with lots of technical jargon. https://www.thecrimson.com/article/2013/12/13/economics-science-wang/ https://www.thecrimson.com/article/2013/12/13/economics-scie...
deleted 4mo ago
[deleted]
izend 4mo ago
There is very little opportunity right now in Canada so I am not surprised the GDP growth has come in negative. It will probably be positive next quarter due to the oil price spike.
slopinthebag 4mo ago
Canada has been in a recession for years if you consider per-capita GDP. But the government has been importing millions of people to artificially boost GDP, and as soon as they started decreasing immigration targets GDP dropped. But Canadians have been feeling the squeeze for years. Especially the youth, who have a ~15% unemployment rate and are the unhappiest demographic of all developed nations :( Also kind of weird how little coverage this is getting in national media. It's not on the front page of CBC.com, it's tucked away in a sidebar on a subpage.
- jayelem 4mo ago
  It’s the 6 the story from the top of cbc.ca/news as I write this.
- Fire-Dragon-DoL 4mo ago
  Is it true? I think unemployment rate for youth in Italy is around 18%. Are they more happy to not work?
snapplebobapple 4mo ago
Elect a carney, get a circus...

68 points by efavdb 4mo ago

Considering all of Trump’s shenanigans it’s impressive it’s just that. With Hormuz, tariffs, and America first, this is the equivalent of a fender dent after spinning out on black ice.

s3graham 4mo ago
We are of course still spinning, so I'm not overly confident we haven't just glanced off a guardrail on the way to the ditch (to belabour your analogy).
MichaelZuo 4mo ago
Well population grew significantly so it’s a bigger decline in per capita terms. Notably this was even though AI systems got decent enough, supposedly, to do simple tasks and answer simple questions correctly.
- bryanlarsen 4mo ago
  That's not true. The population shrunk in the first quarter, so the GDP actually grew by 0.2% on a per capita basis.
  - MichaelZuo 4mo ago
    Oh yes once you include non permanent residents the total number has gone down.
alephnerd 4mo ago
Even without Trump, US-Canada trade was on track to hit choppy waters. Even in the Biden admin (whose alums would have ended up in a Harris admin) there was an openness to armtwist Canada [0] into acquiescing [1]. China did the same [2] with Canada [3][4] until they acquiesced [5]. Heck, even the EU has been slowrolling the ratification of the EU-Canada CETA [6] to protect their (primarily French and Italian) industry. Sadly, it's difficult for a country that is Canada's size to push back when faced against these sized economies. [0] - https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/august/united-states-requests-usmca-dispute-settlement-consultations-canadas-digital-services-tax https://ustr.gov/about-us/policy-offices/press-office/press-... [1] - https://www.canada.ca/en/department-finance/news/2025/06/canada-rescinds-digital-services-tax-to-advance-broader-trade-negotiations-with-the-united-states.html https://www.canada.ca/en/department-finance/news/2025/06/can... [2] - https://www.reuters.com/markets/commodities/china-commerce-ministry-begins-anti-dumping-investigation-into-canadian-canola-2024-09-09/ https://www.reuters.com/markets/commodities/china-commerce-m... [3] - https://www.reuters.com/business/autos-transportation/trudeau-says-canada-impose-100-tariff-chinese-evs-2024-08-26/ https://www.reuters.com/business/autos-transportation/trudea... [4] - https://www.reuters.com/world/china-tells-canada-it-should-cancel-tariffs-chinese-products-2024-11-15/ https://www.reuters.com/world/china-tells-canada-it-should-c... [5] - https://www.reuters.com/world/china/canada-china-set-make-historic-gains-new-partnership-says-carney-2026-01-16/ https://www.reuters.com/world/china/canada-china-set-make-hi... [6] - https://carleton.ca/tradenetwork/research-publications/ceta-ratification-tracker/ https://carleton.ca/tradenetwork/research-publications/ceta-...
napierzaza 4mo ago
[dead]
rayiner 4mo ago
What’s funny is that Q1 per capita GDP growth in the U.S. was about 1.4% annualized (within the normal range) while Canada was only at 0.1%. Trump is the bull in the china shop but it’s not his China he’s breaking.
- alephnerd 4mo ago
  Much of the capex that was invested thanks to IRA and CHIPS subsidizes is starting to go operational and trade barriers enacted during both Trump 1 and the Biden admin remain in action, so it wasn't that surprising that much of the output that was unlocked from that era is continuing. That said, tariffs and trade barriers did help. Heck, I'm a Dem but even I argued that we needed to build trade and non-trade barriers to protect capex that was unlocked via industrial policy.
  - rayiner 4mo ago
    I think Biden was an industrial policy guy at heart and it’s a shame he was so old by the time he got a chance to execute on his ideas.
    - alephnerd 4mo ago
      Yep. That said, much of the stimulus and industrial support packages that were pushed thru in the Obama admin were thanks to the political cover Biden provided as Veep - he was Obama's senate whisperer. That said, industrial policy has bipartisan support at this point now. As you know working DC BigLaw, professional networks are stronger than partisan biases.
bawolff 4mo ago
Given canada has so much oil,is the hormuz situation really a net negative for canada ecconomically? Like obviously its terrible in general, but id expect higher oil prices to help starve off a recesion.
- shigawire 4mo ago
  Global market for oil. If the oil intensity of your economy is high, higher oil prices impacting all goods/services will outweigh increased oilel revenues.
  - sfifs 4mo ago
    Only if you insist on passing on global prices into your domestic economy. Not doing this is very difficult if you're a net importer but very much possible if you're a producer. This "leaves money on the table" but it is very much a choice (with different consequences), just one that rarely occurs to people who have grown up in highly capitalist economies. This is also why historically companies have preferred being vertically integrated to avoid having their supply chains exposed until American economists and brokerages started pushing the cult of specialization. Outside of the US, big conglomerates still operate this way.
    - gucci-on-fleek 4mo ago
      > Only if you insist on passing on global prices into your domestic economy. Not doing this is very difficult if you're a net importer but very much possible if you're a producer. This "leaves money on the table" but it is very much a choice (with different consequences), just one that rarely occurs to people who have grown up in highly capitalist economies. They tried this before [0], and calling it controversial would be an understatement. Probably not a great idea to try it again right before the Alberta succession referendum [1]. [0]: https://en.wikipedia.org/wiki/National_Energy_Program https://en.wikipedia.org/wiki/National_Energy_Program [1]: https://www.cbc.ca/news/canada/edmonton/alberta-separation-referendum-televised-address-9.7208162 https://www.cbc.ca/news/canada/edmonton/alberta-separation-r...
- 4mo ago
deleted 4mo ago
[deleted]

Ava234 4mo ago

[dead]

clickety_clack 4mo ago

I’m surprised it’s taken this long to get here. Talking to a few friends up there, the country has been feeling economically depressed for the last couple of years.

alephnerd 4mo ago
The formal and traditional definition of a recession means a regression in GDP growth. Economic malaise is orthogonal to the technical definition of a recession, though it is often correlated. And conversely, economic growth isn't always correlated with positive feelings (eg. South Korea and Canada in the 2010s)
- mcmcmc 4mo ago
  This is not really true. Consumer confidence has a direct impact on GDP in terms of consumption. Lower confidence = lower consumption. Other components of GDP (Investment, Government spending, Net exports) can increase at the same time which can result in no net change, or even positive growth despite decreases in consumer spending. But saying consumer confidence (ie consumption) has no correlation with GDP is incorrect. This is basic macroeconomics. https://www.investopedia.com/articles/fundamental/103002.asp https://www.investopedia.com/articles/fundamental/103002.asp
deleted 4mo ago
[deleted]
windexh8er 4mo ago
I don't think this is dissimilar to the US to be honest. We just happen to have inflated and questionable revenue being reported at levels that gloss over the true underpinnings of the economy. I think this may be a leading indicator. I really liked how Cory Doctorow framed what Canada could be doing with respect to digital sovereignty in his book ("Enshittification"). Doctorow argues that if Canada repealed its anti-circumvention law (Bill C-11), Canadian companies could legally jailbreak American tech products (John Deere tractors, the Apple App Store, etc) and sell those fixes worldwide, turning the right to tinker into a massive export industry and a form of digital sovereignty. One can dream.

bawolff 4mo ago

I wonder to what extent the clamp down on immigration is related to this. Feels like a factor that gets lost with everyone blaming trump (which dont get me wrong, he deserves)

alephnerd 4mo ago
> I wonder to what extent the clamp down on immigration is related to this It doesn't hurt but it doesn't really help either. According to a buddy of mine from my policy days, GAC has always known there were issues with how immigration was managed in Canada but their diplomatic posts tend to severely lack intel and law enforcement attaches unlike most other foreign services, which made background checking difficult. There was also a recognition internally that the kinds of immigrants Canada wanted would be poached via an O-1 anyhow, so there was a perverse incentive around how skilled immigration was managed. And add to that the fact that the provinces themselves also managed immigration to a certain degree. All that led to a bureaucratic breakdown. Additionally, when even Canadian policymakers are actively targeting American finance, VC, and lobbying jobs (like my friend), it shows you that there are deeper, fundamental issues. Heck, Carney only came back to Canada because his door to 10 Downing Street was effectively shut due to BoJo.
slopinthebag 4mo ago
Yes, Canada has been in a recession for years if you used per-capita GDP, high immigration masked this.
- bryanlarsen 4mo ago
  And this quarter is the opposite. per-capita GDP growth was positive 0.2%.
  - slopinthebag 4mo ago
    Yes because of Alberta and oil due to the ongoing crisis. Single handedly carrying the Canadian economy rn.

usrnm 4mo ago

I have zero knowledge of economics, so maybe someone can help me with the question that's been bothering me lately. Why is being in recession or not decided based on figures not adjusted for inflation? I mean, a large part of Europe is technically not in recession, but growing at a rate that's much lower than inflation is no real growth at all, is it? How does it work?

transdev12 4mo ago
Real GDP is adjusted for inflation, nominal GDP is not. Being in recession is typically defined as negative gdp growth. So to answer your question, being in recession does account for inflation.
dimes 4mo ago
“Real GDP” accounts for inflation already.
josefritzishere 4mo ago
Economics is not a science but it sure likes to pretend that it is with lots of technical jargon. https://www.thecrimson.com/article/2013/12/13/economics-science-wang/ https://www.thecrimson.com/article/2013/12/13/economics-scie...

deleted 4mo ago

[deleted]

izend 4mo ago

There is very little opportunity right now in Canada so I am not surprised the GDP growth has come in negative. It will probably be positive next quarter due to the oil price spike.

slopinthebag 4mo ago

Canada has been in a recession for years if you consider per-capita GDP. But the government has been importing millions of people to artificially boost GDP, and as soon as they started decreasing immigration targets GDP dropped. But Canadians have been feeling the squeeze for years. Especially the youth, who have a ~15% unemployment rate and are the unhappiest demographic of all developed nations :( Also kind of weird how little coverage this is getting in national media. It's not on the front page of CBC.com, it's tucked away in a sidebar on a subpage.

jayelem 4mo ago
It’s the 6 the story from the top of cbc.ca/news as I write this.
Fire-Dragon-DoL 4mo ago
Is it true? I think unemployment rate for youth in Italy is around 18%. Are they more happy to not work?

snapplebobapple 4mo ago

Elect a carney, get a circus...