Data released on two key indicators, labour force data and bankruptcy statistics, continued to reinforce the gloomy outlook for Canada’s economy. Pictured: Prime Minister Justin Trudeau. Photo Credit: Justin Trudeau/X.
It would be a nice change to be able to report some positive economic developments in Canada. But that would be lying. While federal Liberal MPs occasionally trumpet some minor tidbit of economic data that appears to be good for Canada – and they usually misinterpret or misrepresent it to pretend it is good news – things are far from rosy. Last week, data released on two key indicators, labour force data and bankruptcy statistics, continued to reinforce the gloomy outlook for Canada’s economy.
Employment data for July 2024 worsened for the second month in a row, but actually has been declining for much longer as growth in public sector employment has been hiding the dire situation of job creation in the productive private sector. For July, the private sector lost 42,000 jobs, while the government sector gained 41,000. As the private sector finances the public sector, this is clearly an unsustainable situation. Any politician that lauds Canada’s job creation performance in recent years, where the vast majority of job growth has happened in government, clearly needs a refresher course in Economics 101.
The unemployment rate stayed unchanged at 6.4 per cent as despite an overall job loss the labour force participation rate (the proportion of people actively looking for work) also declined slightly. While our aging population is well recognized as having a negative impact on the labour force, the most recent data showed that the major declines in labour force participation were among people younger than 65. As for which groups were most likely to be unemployed, that would be recent immigrants and young people. Despite the politicians’ justification of increasing immigration to fill job openings that would otherwise remain unfilled, the unemployment rate for immigrants arriving in Canada in the last five years increased by over three percentage points to 12.6 per cent. Barely half of students aged 15 to 24 were employed, a very low rate that is in part attributable to low-skilled immigrants snapping up the jobs that summer students would normally fill.
The only slight silver lining in these negative economic numbers is that they should encourage the Bank of Canada to reduce interest rates in their next announcement scheduled for Sept. 4. Given how stubborn the recent bout of inflation has proven to be, it is expected the Bank will lower interest rates very gradually over the next year or so assuming they are convinced they have vanquished inflation for the time being. Unfortunately, this very gradual decline will not be much help to the millions of Canadian mortgage holders whose mortgages come up for renewal in the next year.
Bankruptcy data for the second quarter of 2024 mirrored this dismal trend. Total insolvencies – including consumer and business bankruptcies – increased by over 13 per cent in the second quarter of this year compared to the same period in 2023. Consumer insolvencies were up 12.3 per cent, their highest level in over four years. Business bankruptcies increased by over 58 per cent relative to the second quarter of last year. Small- and medium-sized businesses were especially hard-hit, as they are typically more affected by consumer spending deceases taking place in the current environment of increased inflation, interest rates and taxes. The fact that many Canadians will be having to refinance their mortgages at significantly increased rates in the next year indicates that we haven’t seen the end of inflated bankruptcy numbers.
While bad economic developments are hardly unique to Canada, there is no doubt that much of our difficult economic situation is not due to global forces but rather to deliberate choices made by the current federal Liberal government. Canadians and businesses are grossly overtaxed and receive minimal if any value for all the extra money paid. So-called climate measures reduce Canadians’ standard of living while doing nothing for the global climate. Opportunities to enrich our economy and improve Canadians’ lives by developing the resource sector are ignored.
Business investment is giving Canada a wide berth as our federal government is viewed as so flakey and “woke” there is no predicting how the rules may change tomorrow to ruin today’s business deal. This kind of extreme uncertainty is the bane of business. Basic public services Canadians count on are crumbling with no improvement in sight, overwhelmed by out-of-control immigration. Hate-mongers and serious criminals out on bail roam our streets to prey on innocent people with no resistance from our so-called authorities. Despite all of these terrible developments, the Trudeau government shows no signs of changing direction.
It’s no wonder Canadians are in a miserable mood. What is perhaps most depressing is that, at present, it appears that we the citizens in a so-called democracy will not get a chance to express our views via an election for another 14 months – a very long time in politics. Numerous commentators have recently noted how Conservative leader Pierre Poilievre is pursuing a very lively summer tour around Canada, meeting citizens and the media in all parts of the country and announcing his many different policies compared to the Liberals.
Meanwhile, Liberal leader Justin Trudeau has enjoyed a beach vacation and occasionally pops up unannounced in various spots across Canada, doesn’t speak with media then disappears again. This is somewhat understandable considering Trudeau’s unpopularity and the likelihood he will be heckled if Canadians are aware of his schedule in advance. However, given all of the serious economic, geopolitical and other problematic issues Canada currently faces, this elusive and irresponsible behaviour from a Prime Minister that is still supposedly on the job is inexcusable. It’s about time we usually placid Canadians contact our Members of Parliament and demand an election as soon as possible. We deserve nothing less.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
