Although most analysts predict a recession will officially begin in Canada later this year, according to some other measures, one is already underway

Real GDP per capita data, a key indicator of living standards, reveals Canada is already experiencing a per capita recession and it could soon get worse. 

According to the real estate news platform Better Dwelling, a real GDP per capita recession occurs after two consecutive quarters of real GDP per capita contractions. 

Canada’s exploding population growth via surges in immigration could be skewing the real state of the economy when measured by aggregate GDP – the most common measure when reporting recessions. 

According to Statistics Canada, real GDP per capita is “often used” when checking for standard of living. 

“GDP per capita is often used for assessing the standard of living and for making cross-country comparisons in the economic standing of a country,” writes Statistics Canada. 

Data shows that a real GDP per capita recession already began last year. The figure saw a 0.9% contraction in Q4 of 2022 and in Q3 it also fell by 0.2% – marking two consecutive contractions. 

Recently, the credit-rating agency Barclays downranked some of Canada’s biggest banks over fears of a recession

“While we do not anticipate that the Canadian banks’ second quarter will demonstrate much earnings weakness, we believe that cracks in the foundation will become evident,” said Barclays head researcher John Aiken. 

“While we continue to see long-term value in the Canadian banks and are not concerned with their solvency, we do anticipate near-term pressures will continue to mount and weigh on sentiment.”