Former Bank of Canada governor Stephen Poloz has stated that Canada is currently experiencing a recession, with its weak economic growth being supported by significant levels of immigration.
During a webinar on Dec. 3, Poloz expressed his view, saying, “I would say we’re in a recession. I wouldn’t even call it a technical one.” He explained that while the technical definition of a recession involves two consecutive quarters of negative GDP growth, Canada has not met this criteria due to the influx of immigrants boosting consumption and driving GDP growth. However, when looking at per-capita GDP figures, a different picture emerges.
Poloz likened the current economic situation to “swimming naked while the tide is rising,” suggesting that when the tide goes out, the true state of the economy will become apparent.
Poloz attributed this decline to a 30 percent increase in the cost of living, which has impacted discretionary spending, coupled with stagnant wages.
He also highlighted the unexpected fall in inflation rates, which dropped below the Bank of Canada’s target of 2 percent. Additionally, he discussed the potential impact of U.S. President-elect Donald Trump’s proposed tariffs on Canada and Mexico, warning that this could further affect inflation and the value of the Canadian dollar.
Furthermore, Poloz expressed concerns about the potential need to keep interest rates higher due to the tariffs, leading to a scenario of deeper stagflation.
Bank of Canada senior deputy governor Carolyn Rogers also raised alarms about the country’s weak productivity rate, calling it an economic “emergency.”
Please rewrite this sentence for me.
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