Canada’s consecutive contractions in gross domestic product in recent quarters sparked some concerns about whether the economy had entered a recession, according to a recent RBC Economics report.
“We don’t back that view, nor does the C.D. Howe Institute Business Cycle Council, responsible for formally dating Canadian recessions,” it said.
“A core reason for looking beyond GDP growth is the sharp swings in population growth Canada has experienced. These continue to disrupt traditional interpretations of data. Notably, the past two quarters of GDP decline both coincided with population declines—the first on record since the 1950s.
“While the total pie shrank, real per-person growth has continued to expand. This matters because per-capita measures better reflect how households and workers experience the economy. Between 2023 and 2024, per-person GDP declined persistently while headline GDP was overstating economic health.
“Now the opposite is true: Headline GDP looks worse than reality, while Canada’s in early-stage recovery from a soft patch that began in early 2023.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
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