
The “historically unprecedented underperformance” of the Canadian economy relative to its peers is not likely to drastically improve soon.
That was the somber message delivered by Nathan Janzen, assistant chief economist with RBC, who gave an economic update at the Truckload Carriers Association’s Bridging Border Barriers event Nov. 20.

However, that historical underperformance will likely motivate the Bank of Canada to continue reducing interest rates, which should benefit consumers and businesses, alike, Janzen added.
“The next six to nine months still doesn’t look that great for Canada,” Janzen said.
The Canadian dollar is projected to further weaken, and by mid-2025 it could take $1.43 Canadian to buy a U.S. greenback.
The global economy is continuing to grow, led by emerging markets and the U.S., but growth in China is slowing and manufacturing is softening. The U.S. economy is stronger than that in Canada, Janzen said, but growth is coming from consumer spending on services and government spending – neither of which benefits the Canadian economy.
Canada’s GDP growth has come from population growth. Canada has added more than 3 million people over the past three years.
“Every one of those 3 million who arrive is a new consumer,” Janzen pointed out.
However, GDP per capita in Canada has contracted by about 3% from 2019 levels and is little changed from 2014. “It is unusual to have that long a period where per capita GDP is declining,” said Janzen. U.S. GDP per capita is up 10% over the same time.
Canada is underperforming the U.S. in GDP per capita by the greatest margin since at least the 1960s, Janzen noted.
With the Trump administration set to take the reins in the U.S. in January, Janzen noted there could be some trade disruptions. However, he added “We think Canada mostly won’t be the target of those disruptions. But that doesn’t mean we won’t get impacted.”
Even if Canada isn’t the target of U.S. trade protectionism, our supply chains are so tightly interwoven there could be impacts felt on this side of the border.
Canadians do continue to sit on record levels of cash, Janzen noted, but it’s not evenly distributed, with most of that money sitting in the bank accounts of higher income earners.
Housing affordability remains a challenge on the lower end of the income spectrum.
“The shortage of housing got significantly worse as we added a lot of new people without adding a lot of new homes,” Janzen reasoned.
The silver lining for the economy is that inflation is slowing. And, Janzen added, lower supply chain (including trucking) costs should point to lower prices for consumers. Small consolation for most of those in the room, but a factor that could boost consumer spending. As Canada attempts to slow immigration levels in the coming years, labor shortages could emerge, and the Canadian population will get older. But Janzen said the Canadian economy should look better in the second half of 2025 with some improvements to GDP per capita.
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