David Rosenberg: Canada loves people — businesses, not so much

financialpost.com:

First, the good news: Canada’s economy closed 2024 in slightly better shape than was expected, with real gross domestic product growth inching up to a one per cent annual rate (consensus was 0.8 per cent) in the fourth quarter, while the third quarter was revised to a “less negative” print of minus 0.5 per cent from minus 1.1 per cent in the initial report.

But try as I may, I can find nothing positive to say about the Canadian economic backdrop stemming from Statistics Canada’s report.

Keep in mind that because of the ongoing immigration boom, a vote-getter for the Justin Trudeau government, the population expanded at a 3.1 per cent annual rate in the fourth quarter and that followed a 3.3 per cent pace in the third quarter. What that means is that real per capita GDP contracted at a two per cent annualized rate in the fourth quarter after having tumbled 3.7 per cent in the third quarter. For 2023, the Canadian economy on this basis contracted 1.2 per cent.

The level of real GDP per capita, I am sad to say, is no higher today than it was at the end of 2014. There is a bull market in population growth and a nothing-burger for the overall economy. Going back five decades, declines in real population-adjusted economic activity have only occurred in “official” recessions. The Bank of Canada has run out of reasons, beyond being scared of its own shadow, to stick with its unduly tight policy stance.

Not just that, but all the modest growth and then some in the fourth quarter came from the foreign-trade sector (partly reflecting the easing in supply chain bottlenecks): the combination of higher export volumes (5.6 per cent at an annual rate) and lower imports (minus 1.7 per cent in a signpost of weakening demand pressures) was