{"id":11585,"date":"2026-06-08T20:06:02","date_gmt":"2026-06-08T20:06:02","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/?p=11585"},"modified":"2026-06-09T20:09:11","modified_gmt":"2026-06-09T20:09:11","slug":"canadas-per-capita-economy-still-recovering","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/canadian-analysis\/featured-analysis\/insights\/canadas-per-capita-economy-still-recovering\/","title":{"rendered":"Canada\u2019s per-capita economy still recovering"},"content":{"rendered":"\n
\n
\n

Canada\u2019s consecutive contractions in gross domestic product in recent quarters sparked some concerns about whether the economy had entered a recession. We don\u2019t back that view, nor does the C.D. Howe Institute Business Cycle Council, responsible for formally dating Canadian recessions.<\/p>\n\n\n\n

A core reason for looking beyond GDP growth is the sharp swings in population growth Canada has experienced. These continue to disrupt traditional interpretations of data. Notably, the past two quarters of GDP decline both coincided with population declines\u2014the first on record since the 1950s.<\/p>\n\n\n\n

While the total pie shrank, real per-person growth has continued to expand. This matters because per-capita measures better reflect how households and workers experience the economy. Between 2023 and 2024, per-person GDP declined persistently while headline GDP was overstating economic health.<\/p>\n\n\n\n

Now the opposite is true: Headline GDP looks worse than reality, while Canada\u2019s in early-stage recovery from a soft patch that began in early 2023.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\n\n\n\n

To assess the current situation objectively, we examine economic data compared to previous recessions. We found that once accounting for population growth shifts, the economy looks more consistent with an early-stage recovery than a sharp, synchronized contraction typical of a recession.<\/p>\n\n\n\n

That said, structural challenges persist. Weak business investment, a multi-year real estate slowdown, and rising living costs\u2014particularly for lower-income Canadians\u2014all warrant attention. Risks around the conflict in the Middle East and U.S.-Canadian trade tensions also remain heightened, clouding over the outlook for a per-capita economy that has proven relatively resilient so far.<\/p>\n\n\n\n

Per-capita industry GDP<\/h4>\n\n\n\n

Industry GDP data on a per-capita1<\/a><\/sup> basis is looking more resilient in 2026. Services sector output remains robust, supported by solid household spending. Goods-producing sectors, particularly manufacturing, showed softness from persistent U.S. tariffs weighing on foreign demand.<\/p>\n\n\n\n