Canada looking at recession after GDP report
- Thread starter DesRicardo
- Start date
Makes sense as most politicians here seem to have given up entirely. 90% of the news is them trying to appease trump, instead of saying what they can do to build our economy up.
and the last few recessions ended up "well that didnt happen" "it was a easy recession" "its over, you missed it" I dont put alot of thought into forcasters, or the weather man....
Don't worry. They will just print more money and tell the public something like "it was a minor dip".
I guess my issue is that we shouldn't care about the US economy? We're supposed to be independent, yet 90% of canadian politics now is complaining about how america treats us. Instead of staying in what to most people is an abusive relationship, why can't we just leave and go out on our own?
You can't ditch the country's biggest trade partner that easily.
Its happening, but it will take time.
I'd argue it isn't happening at all. Our politicians are cowering in fear of trump. The entire focus is why america is being bullies as opposed to how we can improve our country. Not only that but they don't really seem to want to change either. If they had it their way we'd go back to the status quo of being USA-jr, instead of a new and improved canada where people want to build their factories here.
Actually there are two sides to every story:
Canada’s GDP just fell. The bigger story is ‘beneath the hood’: experts
Canada’s economic output, as measured by Gross Domestic Product (GDP) declined for the third straight month in June as manufacturing production slowed amid the ongoing trade war.
Statistics Canada says the second quarter of 2025 saw a relative decrease in economic output by 1.6 per cent compared to the same period a year prior.
“The Canadian economy experienced a significant export shock in the second quarter as the receipts from the trade war were totaled up,” says principal economist Andrew DiCapua at the Canadian Chamber of Commerce.
“This hit to growth also showed up in weak investment numbers that confirm the sentiment that businesses continue to wait for more clarity.”
Still, many economists feel there are some positives in the report, which the Bank of Canada will likely consider before its next interest rate decision in September.
“Canada’s economy was much stronger than the headline GDP reading would suggest. Yes, the monthly GDP figures aren’t great. They’re not terrible either,” says Derek Holt, vice president and head of Capital Markets Economics at the Bank of Nova Scotia in an emailed statement.
“The key here lies beneath the hood — the domestic economy ripped higher in Q2.”
What was in the StatsCan report?
Statistics Canada reported on Aug. 29 that GDP fell in the month of June by 0.1 per cent, which was the third consecutive decline following contractions in April and May. This also means the second quarter of 2025, from April through June, saw a 0.3 per cent drop in GDP, after the first quarter of the year saw an increase of 0.5 per cent.
On a seasonally adjusted annualized basis, which helps reveal underlying trends by stripping away factors that reoccur during the same period each year, the second quarter of 2025 saw GDP decline 1.6 per cent compared to 2024.
Two straight quarters of declines in GDP is what most economists consider to be an economic recession, but some economists are seeing some silver linings in the fine details of the report from Statistics Canada.
Holt describes how the first quarter of the year saw businesses rushing to stockpile goods and ship out as much as possible before most of U.S. President Donald Trump’s tariff policies came into effect, and this is “wildly distorting” the important trends. This means at first glance, the GDP data for the second quarter may seem worse, at least in part, because relative to the first quarter it wasn’t as strong in terms of Canada’s imports and export receipts.
“Why should anyone care (about Final Domestic Demand)? For two reasons: GDP is being wildly distorted by tariff front-running and unwinding effects in trade and inventory numbers and so it’s important to smooth them out over time while remaining cautious toward the path ahead, ” says Holt.
“The second reason one should care about Final Domestic Demand is because of what it reveals about the household sector.”
Holt then highlights how he sees Final Domestic Demand was positive in the second quarter of 2025 in showing consumer spending was up 4.5 per cent compared to the previous year, on a seasonally adjusted basis, and housing investment was up 6.3 per cent.
Statistics Canada also says that in June, goods-producing industries contracted by 0.5 per cent and was led by slowdowns in manufacturing and utilities, and 11 out of 20 sectors showed declines.
With manufacturing in particular, June marked the third decline in four months so far this year. Statistics Canada notes in its monthly survey of manufacturing that two fifths of manufacturers say they are being impacted by tariffs.
This comes as trade tensions with the United States and China continue, which for months has been expected to hamper the Canadian economy, especially the manufacturing secto
What could this all mean for interest rates?
Although the GDP report showed Canada’s economy shrank slightly in June of 2025 compared to previous months, and more significantly in the second quarter compared to last year on a seasonal basis, economists are seemingly mixed on how the Bank of Canada may respond.
“The rebound in domestic final demand is a sign that there remain decent consumer spending fundamentals humming beneath the surface,” says DiCapua.
“This result is weaker than the Bank of Canada was expecting and will certainly put a heavy hand on the Governing Council to resume interest rate cuts at their September meeting.”
The Bank of Canada will be updating its monetary policy on Sept 17, which will include a decision on whether or not to change its current overnight benchmark lending rate of 2.75 per cent. If rates change, this could impact how much individual Canadians and business owners pay to borrow money for things like a mortgage or bank loan.
Ahead of the announcement, the central bank will get more economic data to aid its decision making in addition to Friday’s GDP report, including updates on Canada’s job market and consumer price inflation for August.
“The Bank of Canada should emphasize the Final Domestic Demand detail— which they have always tended to do in their statements at times like this—and fade the headline GDP number,” says Holt.
“I still want to see next Friday’s spin of the wheel for Canadian jobs (+35k is my estimate) and then the next week’s CPI (Consumer Price Index) figures and other information, but the market may not be correctly interpreting what these numbers mean to the Bank of Canada.”
globalnews.ca
Canada’s GDP just fell. The bigger story is ‘beneath the hood’: experts
Canada’s economic output, as measured by Gross Domestic Product (GDP) declined for the third straight month in June as manufacturing production slowed amid the ongoing trade war.
Statistics Canada says the second quarter of 2025 saw a relative decrease in economic output by 1.6 per cent compared to the same period a year prior.
“The Canadian economy experienced a significant export shock in the second quarter as the receipts from the trade war were totaled up,” says principal economist Andrew DiCapua at the Canadian Chamber of Commerce.
“This hit to growth also showed up in weak investment numbers that confirm the sentiment that businesses continue to wait for more clarity.”
Still, many economists feel there are some positives in the report, which the Bank of Canada will likely consider before its next interest rate decision in September.
“Canada’s economy was much stronger than the headline GDP reading would suggest. Yes, the monthly GDP figures aren’t great. They’re not terrible either,” says Derek Holt, vice president and head of Capital Markets Economics at the Bank of Nova Scotia in an emailed statement.
“The key here lies beneath the hood — the domestic economy ripped higher in Q2.”
What was in the StatsCan report?
Statistics Canada reported on Aug. 29 that GDP fell in the month of June by 0.1 per cent, which was the third consecutive decline following contractions in April and May. This also means the second quarter of 2025, from April through June, saw a 0.3 per cent drop in GDP, after the first quarter of the year saw an increase of 0.5 per cent.
On a seasonally adjusted annualized basis, which helps reveal underlying trends by stripping away factors that reoccur during the same period each year, the second quarter of 2025 saw GDP decline 1.6 per cent compared to 2024.
Two straight quarters of declines in GDP is what most economists consider to be an economic recession, but some economists are seeing some silver linings in the fine details of the report from Statistics Canada.
Holt describes how the first quarter of the year saw businesses rushing to stockpile goods and ship out as much as possible before most of U.S. President Donald Trump’s tariff policies came into effect, and this is “wildly distorting” the important trends. This means at first glance, the GDP data for the second quarter may seem worse, at least in part, because relative to the first quarter it wasn’t as strong in terms of Canada’s imports and export receipts.
“Why should anyone care (about Final Domestic Demand)? For two reasons: GDP is being wildly distorted by tariff front-running and unwinding effects in trade and inventory numbers and so it’s important to smooth them out over time while remaining cautious toward the path ahead, ” says Holt.
“The second reason one should care about Final Domestic Demand is because of what it reveals about the household sector.”
Holt then highlights how he sees Final Domestic Demand was positive in the second quarter of 2025 in showing consumer spending was up 4.5 per cent compared to the previous year, on a seasonally adjusted basis, and housing investment was up 6.3 per cent.
Statistics Canada also says that in June, goods-producing industries contracted by 0.5 per cent and was led by slowdowns in manufacturing and utilities, and 11 out of 20 sectors showed declines.
With manufacturing in particular, June marked the third decline in four months so far this year. Statistics Canada notes in its monthly survey of manufacturing that two fifths of manufacturers say they are being impacted by tariffs.
This comes as trade tensions with the United States and China continue, which for months has been expected to hamper the Canadian economy, especially the manufacturing secto
What could this all mean for interest rates?
Although the GDP report showed Canada’s economy shrank slightly in June of 2025 compared to previous months, and more significantly in the second quarter compared to last year on a seasonal basis, economists are seemingly mixed on how the Bank of Canada may respond.
“The rebound in domestic final demand is a sign that there remain decent consumer spending fundamentals humming beneath the surface,” says DiCapua.
“This result is weaker than the Bank of Canada was expecting and will certainly put a heavy hand on the Governing Council to resume interest rate cuts at their September meeting.”
The Bank of Canada will be updating its monetary policy on Sept 17, which will include a decision on whether or not to change its current overnight benchmark lending rate of 2.75 per cent. If rates change, this could impact how much individual Canadians and business owners pay to borrow money for things like a mortgage or bank loan.
Ahead of the announcement, the central bank will get more economic data to aid its decision making in addition to Friday’s GDP report, including updates on Canada’s job market and consumer price inflation for August.
“The Bank of Canada should emphasize the Final Domestic Demand detail— which they have always tended to do in their statements at times like this—and fade the headline GDP number,” says Holt.
“I still want to see next Friday’s spin of the wheel for Canadian jobs (+35k is my estimate) and then the next week’s CPI (Consumer Price Index) figures and other information, but the market may not be correctly interpreting what these numbers mean to the Bank of Canada.”
Canada’s GDP just fell. The bigger story is ‘beneath the hood’: experts - National | Globalnews.ca
Canada's Gross Domestic Product, a measure of economic output, showed a third straight decline in June of 2025, according to Statistics Canada.
globalnews.ca
No the cause is the Liberal's refusal to be a good friend to the U.S. and to nurture the trade relationship.
As in everything would be fine if Canada just said they'd love to be the 51st state?
Really, how do you even believe that?
Thats what may happen, but its an entanglement that really started in 1992, so its not gonna happen overnight or easily. It will take at least 10-15 years,.
