Canadian government-subsidized legacy media has been overworked in the first week of the new year broadcasting Prime Minister Mark Carney’s additional $2.5 billion to the Ukraine war effort, the “kidnapping” of Venezuela’s Nicolás Maduro by the Americans, the photo ops of Carney’s trip to France, and his closed-door meetings with European Union officials on the Canadian Forces participation in Ukraine.
What mainstream media has not reported on is the biggest news story that is facing Canadians in 2026. It includes facts that the Carney government would rather not address. The core issue facing Canadians is one of affordability. What are the prospects for Canadians living in St. Catharines, North Battleford, or Canmore? Canadians’ primary concern is not found in Geneva, Brussels, or Davos, but rather trying to balance the household budget at the kitchen table. There is much to be concerned about in the upcoming year in a country where economic productivity is sagging and standard of living is dropping.
Canada’s economy is on a downward trajectory
By almost all metrics Canada’s economy is on a downward trajectory that will continue through this year and perhaps for years to come. Exports have been lower due to the uncertainty of the Canada-U.S. trade, which accounts for more than three of four Canadian export dollars. Investment in factory and plant construction is declining. Foreign investment in Canadian projects and companies is down, and Canadian investors are looking abroad for their next investment. Livio Di Matteo, an economics professor at Lakehead University, observed in an Epoch Times review of what to expect this year, “Forecasting the outlook for Canada’s economy in 2026 is ultimately an exercise in caution, given the large number of domestic and international economic moving parts.”
Dawn Desjardins, chief economist at Deloitte Canada, joined BNN Bloomberg to discuss Deloitte’s economic report that forecasts the Canadian economy will grow more slowly in 2026. Deloitte is predicting that the country’s sluggish economy will “decelerate mildly” at 1.5 per cent in 2026, compared to 1.7 per cent last year. This dire prediction mirrors the Bank of Canada’s forecast that the country will experience an annual GDP growth averaging a lower 1.4 per cent through 2026 and 2027.
So, as the country’s economic engine is backfiring, the Carney government continues with its unbridled spending. The latest data just before Christmas revealed that Ottawa recorded an $18.37 billion budget deficit for the first seven months of the 2025-26 fiscal year and this represents a 26.6 per cent increase from the same period last fiscal year. In October 2025 alone, the Carney government posted a deficit of $2.28 billion, compared to the $1.49 billion deficit posted by the Trudeau government a year earlier.
Couple this overspending with Statistics Canada’s recent data that shows the country’s GDP fell sharply in October, and this explains why Fitch Ratings has lowered Canada’s credit rating score with the warning that “persistent fiscal expansion” and increasing debt has negatively impacted the country’s credit profile and it “may be exacerbated by persistent economic underperformance caused by tariff risks and structural challenges, including low productivity.” Herbert Grubel, emeritus professor of economics at Simon Fraser University and senior fellow at the Fraser Institute, sees Canada heading for a fiscal crisis, which will result in “a 1990s-style reckoning.” Grubel observed in a Financial Post editorial that the current government fiscal path “is unsustainable” and he states, “Canada urgently needs a national discussion about deficits, debts and our politicians’ gaslighting. The costly consequences of not acting increase every day.”
Further discouraging economic news from mid-December came by way of new Fraser Institute data that underlined the country’s “economic stagnation.” Canada has a shrinking stock market: in 2008 the country’s two exchanges had 3,520 publicly traded companies, compared to 2,114 in 2024. More serious is the data showing a 94 per cent freefall drop in new public stock listings (IPOs) on Canadian exchanges since 2010. In 2024 only five IPOs were recorded in Canada. The report concluded, “We believe Canada’s economy will suffer if the country’s stock markets remain on the current path leading to a progressively smaller place in the financial system.”
The data all reflects an economy in a decline. The OECD has Canada at the bottom of its advanced countries standings for economic growth through this decade, to 2030 and beyond to 2060. The Canadian Chamber of Commerce issued a report that calculated, between now and 2030, Canada is projected to fall behind $31 trillion in lost economic output ($224,337 USD per person). It is to the point that Canada’s long-standing and widening productivity gap with the U.S. suggests that Canada’s economy should no longer be compared to the robust economy south of the border. Perhaps Canada’s economic data should be compared with that of a central or south American country or an underperforming nation in the EU.
Canadians standard of living is in decline
Senior Deputy Governor of the Bank of Canada Carolyn Rogers observed in a speech at the Canadian Club in Toronto this fall that Canada’s projected dismal growth in GDP through 2060 is a sign of a weak economy and will impact Canadians’ quality of life and financial resilience. The country’s economic performance impacts directly on affordability issues for Canadians. What Rogers intimated is the need for an immediate course correct in the federal government’s fiscal and economic plans to stop the decline in Canadians’ standard of living.
It is not overstating the case that today many Canadians are living with mounting financial stress, a quiet but increasingly heavy despair. An Angus Reid survey in late 2025 found that cost-of-living worries were top of mind; over a third of those contacted (36 per cent) said they are poorer this Christmas than they were last Christmas. More than one in five (22 per cent) were facing “high financial pressure.” In another survey, Liaison Wallet Tracker found that more than a third of Canadians (37 per cent) say their financial situation is worse than it was 30 days ago. David Valentin of Liaison Strategies observed, “People are doing the math every day, at the grocery store, at the gas pump, and when the bills come in. What stands out is how few Canadians are saying they’re better off month-over-month, and how consistently cost-of-living pressures show up as the dominant source of stress.”
A Pollara annual economic outlook report released earlier this week revealed that a majority of Canadians are not feeling good about their prospects in 2026. Three in five Canadians (61 per cent) expect the country’s economy to worsen. There are personal economic challenges for individuals and families at every turn.
- Canadian Bankers Association (CBA) data shows mortgage arrears are climbing and now sit at a five-year high. The CBA report also found that banks are “holding fewer total mortgages,” a move that suggests banks are mitigating their risk exposure with the country’s economic prospects.
- According to CMHC, renters will find it harder to find an affordable unit as the costs of an average apartment rose in 2025 by 5.1 per cent, well above the 3.5 per cent increase in wages – and the government’s own 2 per cent inflation target.
- RBC Economics outlook for the new year showed that since 2020 “prices for essentials including food and housing have grown much faster, both at about 30 per cent, well outpacing wage growth (25 per cent).” Food inflation will continue to be the greatest stress-factor for Canadians: in the coming year, families can expect to pay $994 more on food and one in four Canadian households will experience food insecurity, according to Canada’s Food Price Report 2026. The 2025 Hunger Count report showed a 99.4 per cent increase in the use of food banks since 2019 and “one out of every 16 Ontarians – up a staggering 87 per cent” visit food banks. Across Canada in the month of March 2025, there were 2.2 million visits to food banks (the highest level ever recorded).
- And then there are taxes…. The Fraser Institute reports the average Canadian family paid 42.3 per cent of their income to taxes in 2025, more than the costs of families’ essentials of housing, food and clothing combined (35.5 per cent). The Canadian Taxpayers Federation’s recent annual report states Canadians can expect even higher tax bills in 2026.
The cost-of-living conditions in the country has become so challenging that last year Statistics Canada has recorded an unprecedented surge in the number of Canadians and permanent residents who have left the country to relocate abroad. This should be a warning to the government policy makers – it’s Canada’s wealth that is slowly draining from the country. Romana King, the senior editor at Money.ca observed, “everyday Canadians will pay the price.”
In Carney’s comments on the fall federal budget, he remarked that Canada’s economic challenges “will take some sacrifices” from Canadians. Yet, Canadians are experiencing financial stress and increasing anxiety with their current economic prospects and their diminishing standard of living. Much more attention from elected representatives and media must be given to the economic challenges before the country and its citizens. The growing crisis of affordability is the greatest preoccupation for far too many Canadians.
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
