EDITORIAL: Freeland’s ‘vibecession’ looks like a recession

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Contrary to claims by Finance Minister Chrystia Freeland that Canadians are experiencing a “vibecession,” the former governor of the Bank of Canada says we’re in a real economic downturn.

“I would say we’re in a recession, I wouldn’t even call it a technical one,” Stephen Poloz, Bank of Canada governor from 2013 to 2020, said during a webinar on Tuesday, reported by the Financial Post.

A technical recession means two consecutive quarters of negative economic growth.

Statistics Canada reported last week that our economy grew at an annualized rate of 1% in the third quarter of 2024, down from 2.2% in the second quarter.

But Poloz said this was largely due to the high immigration policies of the Trudeau government — more people means the production of more goods and services.

The more significant figure, he said, is that on a per-capita basis, our economy has contracted for six consecutive quarters — the latest decline was 0.4% — and for eight quarters of the past nine.

That means that while Canada’s economic pie has been inflated by high immigration, the slice every Canadian gets is getting smaller.

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Poloz said Canadians endured a 30% increase in the cost of living during the recent bout of high inflation and that big government spending, including the Trudeau government’s two-month GST holiday on some consumer goods, is “not the sort of thing to build your recovery on.”

Meanwhile, Canada’s annual food price report compiled by four Canadian universities estimated this week that grocery prices will rise by 3% to 5% in 2025, meaning families will be spending up to $800 more on groceries compared to this year.

The Fraser Institute reported that since the Trudeau government came to power in 2015, it has expanded the size of the federal civil service by 26.1%, almost three times the rate of population growth at 9.1%.

In addition, since 2019, Canada’s federal, provincial and municipal governments have increased employment in the public sector by 13.3%, compared to just 3.6% growth in the private sector, all of which puts added pressure on government debt and deficits.

In light of all this, Freeland’s claim that while Canadians feel we’re in a recession, the economy is relatively strong — leading to what she called a “vibecession” — is absurd.