Canada issues recession warning to Australia


No country has botched up its immigration policy more than Canada.

The employment, housing, infrastructure, and healthcare systems are all in disarray.

Canada’s population expanded by more than 1.2 million people last year, owing to record net overseas migration:

Canada's population surge

This population surge has resulted in a severe housing shortage across Canada:

Canada housing shortage

Housing starts have fallen substantially behind population growth:

Canada home building

Consequently, Canada’s rental vacancy rate has reached an all-time low:

Canada rental vacancy rate

In turn, Canadian rental inflation has skyrocketed:

Canadian rental inflation

The population explosion has also had a negative influence on Canadian productivity, as business investment, infrastructure, and housing have not kept pace.

The National Bank of Canada warned recently that Canada was caught in a “population trap” of whereby there is a “lack the infrastructure and capital stock in this country to adequately absorb current population growth and improve our standard of living”:

Canada capital shallowing

“Our policymakers should set Canada’s population goals against the constraint of our capital stock, which goes beyond the supply of housing, if we are to improve our productivity”, the National Bank of Canada economists said.

The Bank of Nova Scotia came to the same conclusion, warning that the recent surge in immigration-driven population growth is behind two-thirds of the “massive” decline in productivity over the past two years:

Canada productivity

The drop in productivity stems from a combination of two factors: chronically low business investment in Canada and the dramatic surge in population.

Canada’s historic population increase has maintained the illusion of growth, while aggregate GDP continues to rise.

However, real per capita GDP now approaches 2017 levels:

Canada GDP

Canada’s GDP per capita decreased for the sixth consecutive quarter in Q4, dropping 3.2% since the beginning of monetary tightening.

Retail sales have also fallen sharply when adjusted for population growth:

Canada Retail sales

Nominal Canadian private sector wage growth has similarly stalled at below 3%, a number comparable to that experienced prior to the pandemic and significantly lower than the 4.5% observed south of the border:

Canada wage pressures

Meanwhile, company insolvencies have soared across Canada:

Canadian business insolvencies

In turn, the number of active businesses across Canada is falling for the first time since the pandemic recession:

Canada active businesses

“The number of active businesses fell to 929,000 during the month, down 0.2% from a year earlier”, the Bank of Canada economists wrote.


“Outside of the COVID recession, this is the first annual decline in the number of active businesses since 2017”.

“Back then, however, the bulk of the weakness was concentrated in energy-producing provinces. This was not the case in December”.

“As shown, eight out of ten provinces reported an annual decline in the number of active businesses in their respective territories”.

“Outside of the COVID recession, this is the worst diffusion since at least 2016. Given the current level of interest rates, the situation is unlikely to improve in the coming months”, the authors wrote.

A surge of international students, many of whom entered through fraudulent institutions, has fuelled Canada’s migration boom, similar to Australia’s.

Ben rabidoux Tweet

“A post-Covid explosion in foreign students has resulted in housing shortages and flawed academic programs being taught in strip malls. The immigration minister is blunt: “People are being exploited”, Bloomberg reported.

Canada’s unemployment rate is rapidly growing, reaching 5.8% in February:

Canada unemployment rate

Long queues of international students seeking entry-level jobs are becoming viral videos.

Canadian students lining up for jobs

International students in Canada line up for entry level jobs.

Canada is living proof that the economic situation in Australia could worsen if the Albanese government continues to follow the same braindead mass migration policies as his mate, Justin Trudeau.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.