EDITORIAL: Recession looms as Parliament resumes

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The most significant political issue as Parliament resumes on Tuesday, with the speech from the throne by King Charles, is that Canadians are looking down the barrel of a recession this year.

A recent survey of 34 economists by Bloomberg News predicts it’s already started, with Canada’s gross domestic product (GDP) expected to shrink by 1% on an annualized basis in the second quarter of this year (April-June) and 0.1% in the third quarter (July-September).

Two consecutive quarters of negative GDP growth qualifies as a technical recession and the warning signs are already there.

Statistics Canada reported earlier this month that Canada’s April unemployment rate increased to 6.9%, up 0.2% from March.

That matches the jobless rate in November 2024 and is the highest since January 2017, excluding the 2020-21 pandemic years.

The optimistic outlook is that Canada will still record 1.2% growth in 2025 overall and 1% next year.

But even that weak growth will depend on decisions by Prime Minister Mark Carney’s government, including its success in dealing with the economic uncertainty created by U.S. President Donald Trump’s tariff war.

Canada faces other economic issues which were self-inflicted by the previous Liberal government of Justin Trudeau.

Carney noted during the Liberal leadership race that high immigration rates and government spending, averaging a 9% increase year after year, weakened the Canadian economy long before Trump’s tariffs hit.

As reported by Statistics Canada, real GDP per capita, which measures economic output per person adjusted for inflation and is a widely accepted metric of a nation’s standard of living, fell by 1.4% in 2024, following a decline of 1.3% in 2023.

Carney won the April election by saying he was best choice to manage Canada’s relationship with the U.S. — and end the economic uncertainty created by Trump’s tariff war — so now is the time to prove it.

His agenda is enormous.

It includes a middle-class tax cut — which should pass easily — eliminating inter-provincial trade barriers, lowering the cost of living, returning immigration to sustainable levels, making housing more affordable, increasing defence spending to our NATO commitment of 2% of GDP, keeping Canadians safe and reducing the operating costs of the government.

It’s time for Carney to fulfill those promises to Canadians.