Worrying economic indicators paint a less than rosy picture for Canada

When Liberal government ministers answer questions about the current state of Canada’s economic affairs, they attempt to paint a rosy picture.

The finance minister recently spoke to reporters and stated Canada’s economy is “strong and resilient, [and] the economic plan is fiscally responsible.”

Many key economic indicators do not align with those statements. One of the most important economic indicators is the unemployment rate, which refers to the proportion of the population without jobs. Unemployment trending upwards is a negative economic indicator.

Five months ago, at the Human Resources Committee, the employment minister said unemployment is trending downward. Unfortunately, the government’s own numbers confirmed the minister’s remarks are not correct. According to the most recent Statistics Canada labour force survey, Canada’s unemployment rate was 6.1% for April 2024 and it’s been trending upwards since last fall.

What is even more troubling is the government’s Budget 2024 stated it predicts unemployment to rise even more as it’s predicting the economy slowing in 2024.

That indictor is especially worrying for youth aged 15 to 24, where the unemployment rate sits at 12.6%. When young Canadians are unable to secure a first job, they are less likely to be able to move out from their parents’ homes, gain valuable experience and further their early career aspirations.

Another economic indicator of importance is the GDP per capita of a country. GDP per capita reflects economic activity occurring on a per-person basis, a number much more relevant that only GDP itself.

A higher GDP per capita means higher productivity, leading to higher wages, higher quality of life and higher standard of living. A low GDP per capita is associated with lower income, greater poverty and lower quality of life.

Statistics Canada and the International Monetary Fund have reported a drop in Canada’s GDP per capita. Recently, the Fraser Institute published data showing Canada’s GDP per capita fell by 3% the last four years. This indicates Canada’s economy is not flourishing and the standard of living of Canadians has decreased. The numbers are jarring given the GDP per capita of the United States has increased by 7% since 2019.

Analysis by the Organization for Economic Co-operation and Development (OECD) expects Canada to have the slowest growth in per capita GDP among its 38 member countries over the next 40 years. Per capita GDP in Canada has now significantly fallen to just 73% of U.S. levels.

Another measurement of a weak economy is the Canadian dollar being consistently low in value against the U.S. dollar. Canada’s economy is integrated in many ways with our biggest trading partner, the United States. A low-value dollar means Canadians’ spending power is less relative to U.S. costs. That means everything Canadians buy that is made in the U.S.—whether it is a refrigerator, a bicycle or anything else—costs Canadians more.

Economic indicators related to housing also have worrying figures. According to Statistics Canada, housing starts across the country are down 9% compared to this time last year. It’s even worse in British Columbia, where it’s down 11% and Vancouver’s starts are down a staggering 30%. Housing starts in the U.S. are up, again showing Canada’s lag comparatively.

Another troubling indicator from Statistics Canada is the reduction of 11,000 jobs in the construction sector. That warrants concern over how the federal government will meet its announced aggressive, and obviously out of touch, house building targets with such a decreasing workforce.

The troubling figures seen in these economic indicators are all items my Conservative colleagues and I will be focusing on in the coming months as we debate the ninth Liberal deficit spending and tax increase budget, which affects employment, affordability, quality of life and housing – all important issues I hear continually about from local residents.

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Tracy Gray is the Conservative MP for Kelowna-Lake Country.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.