CHARLEBOIS: Canada's economy is shrinking. Doesn't matter how we call it
Dr. Sylvain Charlebois writes, "The reality is that Canada’s economy was showing signs of weakness long before the latest round of trade disputes."
By: Sylvain Charlebois
Sylvain Charlebois is director of the Agri-Food Analytics Lab at Dalhousie University, co-host of The Food Professor Podcast and visiting scholar at McGill University.
Canada’s economy is now smaller than it was when Prime Minister Mark Carney took office. The country has recorded two consecutive quarters of declining real GDP, and many economists now consider Canada to be in a technical recession. Predictably, much of the blame has been directed south of the border, toward President Donald Trump and the uncertainty surrounding trade relations with the United States. Trade tensions have certainly not helped. Businesses dislike uncertainty, and agri-food is particularly vulnerable to disruptions in cross-border commerce. But to suggest that Canada’s economic troubles are primarily Trump’s fault is both convenient and misleading.
The reality is that Canada’s economy was showing signs of weakness long before the latest round of trade disputes. Productivity growth has lagged behind that of the United States for years. Business investment has remained disappointingly weak. GDP per capita has struggled despite rapid population growth. Housing costs have soared, infrastructure has failed to keep pace with demographic expansion, and many sectors have become increasingly dependent on government spending rather than private-sector investment. Trump may have added pressure to an already fragile system, but he did not create the underlying vulnerabilities.
This matters because while Canada’s food economy has so far remained remarkably resilient, it does not operate in isolation from the broader economy. Agriculture and agri-food continue to perform relatively well compared to many other sectors. Canadians may postpone buying homes, vehicles, or appliances, but they still need to eat. Grocery stores remain busy. Food manufacturers continue to produce. Farmers continue to plant, harvest, and raise livestock. Food exports continue to support economic activity across the country.
Yet resilience should not be mistaken for immunity. If economic weakness persists, the consequences for agri-food will eventually become more visible. The first signs are already emerging in food service, where many restaurants are facing softer demand as consumers become increasingly price-sensitive. Rising labour costs, occupancy expenses, insurance premiums, and financing costs continue to squeeze margins. For many operators, profitability has become increasingly difficult to sustain.
The greater concern, however, lies in investment and competitiveness. Food processors facing economic uncertainty may postpone expansion projects. Farmers may delay equipment purchases or modernization efforts. Investors may choose to place capital elsewhere. The danger is not that Canada will suddenly stop producing food. The danger is that the sector gradually loses momentum while competitors accelerate.
Across the United States, billions of dollars continue to flow into new food-processing facilities, logistics infrastructure, and agricultural innovation. South American producers are expanding their global footprint. Other countries are aggressively pursuing productivity gains and export opportunities. Canada, meanwhile, risks becoming complacent because the food economy continues to perform reasonably well despite broader economic weakness.
This is why the recession debate matters. The issue is not whether Canadians will continue to buy food. They will. The issue is whether Canada can maintain a competitive agri-food sector capable of attracting investment, creating jobs, driving innovation, and generating long-term growth. A shrinking economy may not immediately trigger a food recession, but it can slowly undermine the conditions that make future growth possible.
Canada’s food economy is not in recession today. In many respects, it remains one of the country’s strongest economic pillars. But no sector can indefinitely outrun the broader economy. Blaming Trump for Canada’s economic challenges may be politically convenient, but it does little to address the structural issues that have been building for years. If policymakers want the food economy to remain a source of strength, they need to focus less on finding external villains and more on restoring Canada’s competitiveness at home.
"But to suggest that Canada’s economic troubles are primarily Trump’s fault is both convenient and misleading." Blaming the economy on Trump is not only convenient and misleading, it's an outright lie! Canada's economy started to sink the moment the Bi-Wonder, Justin Trudeau became PM in October 2015. The virtue signaling on virtually every front in the economy started with his; "We'll grow the economy out from the heart" B.S. Shutting down the energy sector - the economic engine of the Canadian economy - was virtue signaling to the world that PM Socks could save the planet by putting Canada on a disastrous economic course. A course that much of the world is now pulling back from having seen and felt the error of their "climate change" religion ways. Once Carnage was free to reign disaster on Canada after his devastating role as Governor of the Bank of England, the Bi-Wonder enlisted Marx to wreak more havoc on the Canadian economy. While the damage may be turned around quickly by a Conservative government, my children and their children will be paying for the fairy dust that Justin and Company sprinkled across the land for decades to come. A word of advice to the spawn of the Bi-Wonder; I suggest you keep a very low profile as someday you may be made to pay for the sins of your father. And as your father had a direct hand in the chaos that envelopes Canada today, my words may be prescient.
Canada was in recession November 2019 thanks to Liberals/trudeau but then along came the covid scam and the taxpayer $$$$ floodgates were opened to the tune of $750 billion dollars providing a false economy fueled by huge deficit spending where the rich got richer and the poor ended up homeless and at food banks. The left wing extremist Liberals needed something else to keep the economy afloat so subjected Canada to mass legal and illegal immigration. Now having run out of gimmicks to fool Canadians into thinking they are competent they give us a technical recession dreamed up by their employees at Statistics Canada that they hope their low information cult followers Elbows Up crowd will continue to lap up like the run off from a barnyard.