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Not a ‘vibecession’—Canadian living standards are declining

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4 minute read

From the Fraser Institute

By Grady Munro

In June 2019, inflation-adjusted per-person GDP was $59,905 compared to $58,601 in September 2024, a decline of 2.2 per cent. And while per-person GDP has ebbed and flowed during this decline, the third quarter of 2024 marks the sixth consecutive quarter that living standards have fallen in Canada.

During a recent press conference about the Trudeau government’s plan to send $250 cheques to many Canadians and suspend the GST on certain goods and services for two months, federal Finance Minister Chrystia Freeland said Canadians are experiencing a “vibecession,” which is creating negative feelings about the economy despite “really positive economic news.” According to Freeland, these two proposals, which will cost billions, will “help Canadians get past that vibecession.”

But in reality, the economic woes of Canadians are real, and new data from Statistics Canada show that Canadian living standards are declining.

Let’s look at the numbers. From July to September of 2024, after adjusting for inflation, the Canadian economy (as measured by GDP) grew by 0.3 per cent yet per-person GDP (an indicator of living standards and incomes) actually fell by 0.4 per cent.

How can the economy grow while living standards decline?

Because Canada’s rapid population growth, fuelled by high levels of immigration, means the overall economy has increased in size but per-person GDP has not. And during the same three-month period (July to September), Canada’s population increased by 0.6 per cent (or 250,229 people), outpacing the rate of economic growth.

Not merely a one-off, this continues a historic decline in Canadian living standards over the last five years. In June 2019, inflation-adjusted per-person GDP was $59,905 compared to $58,601 in September 2024, a decline of 2.2 per cent. And while per-person GDP has ebbed and flowed during this decline, the third quarter of 2024 marks the sixth consecutive quarter that living standards have fallen in Canada.

Last week, the House of Commons approved the government’s plan to temporarily suspend the GST on select items from December 14 to February 15, at an estimated cost of $1.6 billion (the legislation now goes to the Senate for approval). The government has delayed the “$250 cheques” plan to potentially accommodate NDP demands to expand eligibility to include seniors (the original proposal would have sent cheques to an estimated 18.7 million Canadians at a cost of $4.7 billion).

Neither one of these proposals will incentivize Canadians to work and invest, and therefore these proposals won’t help raise living standards. To help drive economic growth, create jobs and provide more economic opportunities for workers across the income spectrum, the federal government should reduce the overall tax burden on workers and businesses, and make Canada a more attractive place to work and invest.

Despite any claims of a “vibecession,” Canadians remain mired in an actual recession in their standard of living. Minister Freeland’s comments once again prove that this government is disconnected from the reality many Canadians face. It’s not just bad vibes—data shows Canadians are actually worse off today than they were in 2019.

 

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Ottawa Appoints Former Trudeau Intelligence Adviser as “Fentanyl Czar”

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Sam Cooper

Late Tuesday, Justin Trudeau’s administration appointed former RCMP deputy commissioner Kevin Brosseau as Canada’s new “fentanyl czar”—a role created as part of a last-minute deal to avert a major trade war with the United States.

As the government’s lead on the file, Brosseau is tasked with working closely with U.S. counterparts and law enforcement agencies to “accelerate Canada’s ongoing work to detect, disrupt, and dismantle the fentanyl trade,” according to a statement from the Prime Minister’s Office.

“The scourge of fentanyl must be wiped from the face of the Earth, its production must be shut down, and its profiteers must be punished,” the statement continued.

Brosseau, who recently served as deputy national security and intelligence adviser to Prime Minister Justin Trudeau, reportedly brings extensive experience in drug enforcement and organized crime investigations.

“His demonstrated expertise tackling drug trafficking, organized crime networks, and other national security threats will bring tremendous value to this position,” the government statement added.

Financial Fallout: Banks Face Heightened Scrutiny

While the Fentanyl Czar is a major pillar of Trudeau’s promised plan, the most controversial measures are yet to come, including a plan to designate cartels as terrorist organizations. Experts believe that this move could have sweeping impacts on Canada’s financial sector.

Canadian banks, which have long faced criticism for weak anti-money laundering enforcement, may soon face heightened scrutiny, stricter compliance measures, and increased risk exposure. The new designation could lead to U.S. law enforcement aggressively tracking cartel-linked transactions in Canada, with potential repercussions for financial institutions that fail to act.

The Fentanyl Czar appointment is part of a broader $1.3 billion border security plan, which includes:

  • New helicopters and advanced surveillance technology
  • Increased personnel at critical border points
  • Closer coordination with U.S. agencies to disrupt fentanyl trafficking

“I just had a good call with President Trump,” Trudeau wrote on February 3, announcing that his administration had secured a temporary reprieve from U.S. trade penalties. “Nearly 10,000 frontline personnel are and will be working on protecting the border.”

Trudeau also outlined plans to:

  • Designate cartels as terrorist organizations
  • Implement 24/7 surveillance of high-risk border crossings
  • Launch a Canada–U.S. Joint Strike Force targeting organized crime and money laundering
  • Sign a new $200 million intelligence directive focused on fentanyl

With Trump’s sweeping 25% tariffs on Canadian exports still looming, the coming weeks will test whether Ottawa’s promised fentanyl crackdown satisfies Washington—or if Canada’s financial institutions and urban real estate markets, deeply exposed to fentanyl money laundering according to U.S. and Canadian experts, become the next battleground.

More to come.

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Trump signs order forcing agencies to work with DOGE

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From The Center Square

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Billionaire Elon Musk joined President Donald Trump in the oval office Tuesday as the president signed an executive order requiring federal agencies to work with Musk’s Department of Government Efficiency, known as DOGE.

The order will require federal agencies to work with DOGE to significantly reduce their labor force.

A White House fact sheet, first reported by Semafor, says the order requires agencies hire “no more than one employee for every four employees” that are fired, with some exceptions, including for public safety and law enforcement.

DOGE and Musk have dominated the news cycle since Trump took office by exposing an onslaught of controversial federal spending, most notably as USAID, an agency that has been all but destroyed since Trump took office.

While with his young son Lil X, Musk spoke to reporters about DOGE’s efforts to instill what he calls “common sense controls” on federal spending.

“If the people cannot vote and have their will be decided by their elected representatives, by the form of the President, the Senate, and the House, then we don’t live in a democracy,” Musk said. “We live in a bureaucracy.”

The national debt is on track to hit $37 trillion this year, and interest payments on the debt are now one of the largest federal expenses.

Trump touted the cuts to corruption and “kickbacks” in the government when speaking to reporters.

“The public gets it,” Trump said.

Musk responded to criticisms that the agency cuts are a “hostile takeover.”

“The people voted for major government reform and that’s what the people are going to get,” Musk said. “That’s what democracy is all about.”

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