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Brace yourself, Canada's economy is weaker than you think


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A recent report by Desjardins argues that the population boom is masking the full extent of Canada’s economic gloom.

“Surging population growth — the highest since the 1950s — has provided a tailwind to headline economic activity since mid-2022,” said Randall Bartlett, Desjardins’ senior director of Canadian Economics.

The newcomers, who bought cars and home furnishings as they settled in, boosted the economy so that it appeared to “defy the gravitational pull of high interest rates,” he said.
When measured on a per capita basis, however, real gross domestic product has fallen in each of the past four quarters and growth in domestic demand has fared even worse, he said.
Meanwhile in the United States the economy grew by over 2 per cent in the second quarter, while Canada’s economy contracted, showing “the divergence between the two economies,” said economists at BMO Capital Markets.

They now think that Canada’s landing will be “a bit bumpier,” and have cut their estimates for 2023 GDP growth to 1.1 per cent and 0.6 per cent next year, both lower than their forecasts for the United States.

There are several reasons why Canada’s economy is lagging the U.S., “notably in per-capita terms,” said BMO senior economist Sal Guatieri — and one of them is that while labour productivity is rising in the U.S. it continues to fall in Canada.

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Long story short - our fundamentals are in trouble across the board. Businesses have been using temp foreign labour instead of investing in productivity. We're losing ground to most of the other developed nations.

And despite the rosy picture they're trying to paint of a 'little bumpy' correction, there's every reason to believe it will be deep and worse - long.

There are things the gov't can do to begin to address this but they refuse to do any of it, they just talk.

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Population boom is masking the full extent of our economic gloom, says Desjardins

Ummmm, hasn't our economy been based on immigration for a while now?

We buy rubber dogshit and cheap spatulas from China, they save up their money and buy our Metro Van/GTA real estate.

In BC the "old stock" Canadians are constantly migrating towards the interior of BC, or to Alberta and Saskatchewan. 

that's no secret, and it's not racist propaganda either. The big real estate developers like Ozzie Jurock predict it like clockwork. They say that the money comes into Richmond, Bby and Van, and people from there move to Surrey/Delta Langley, they go from there to Abbostford, Chilliwack and beyond, etc.

The home prices in the various areas here are slightly 'out of phase', just like you see in AC voltage vs current. I.e., in AC circuits the voltage goes up before the current goes up, and the current is still going up after the voltage has already started to go back down.

In BC real estate money comes into the coast first, the prices start to go up there and the houses there get into multiple offer mode, while Chilliwack remains calm. The crazy market ripples out eastwards from Van/Rmd. Eventually the multiple offer craze on the coast ends and prices go back down a bit, but the prices out in Chilliwack are still in the heating up phase.

You never see it in reverse, where the markets heat up out in the valley and then residents from there start to migrate towards downtown. 

The same thing happens with houses/townhomes/condos. Houses heat up first, condos last. 

The people who speculate on real estate count on that pattern. If you time your buy/sell poorly here you can really screw yourself. 

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