Mr. Speaker, a recession can be defined as two consecutive quarters of flat or negative GDP growth. By that definition, Canada is in a recession. The government has downplayed the seriousness of these two consecutive flat to negative quarters of growth and painted a picture of an economy with underlying strength. However, that fails to take into account the bigger picture. Here is the bigger picture: In three of the last four quarters, aggregate GDP shrank. That comes on the heels of years of shrinking per capita GDP.
Per capita GDP is a more important measure than aggregate GDP. Here is why. Decades from now, it would be far better to live in a country of 40 million Canadians making double what they make now than to live in a country with 100 million Canadians making the same as they make now. The first country would have a smaller economy than the latter, but it would be more cohesive, more prosperous and more environmentally sustainable, with higher levels of individual income. Many corporate CEOs would prefer the latter country, because the total accessible market would be larger, but the average Canadian would be poorer for it.
Looking at the last three years, the picture of per capita GDP is grim. Canada was effectively in a per capita recession in 2023 and 2024. In 2022, per capita GDP stood at $60,735. In 2023, it shrank by $458. In 2024, it shrank, yet again, by $539. Over a two-year period, per capita GDP dropped by almost $1,000 per person, a drop of about 1.6%.
Looking at the last six years, the picture is not much better. Before the pandemic began, per capita GDP stood at $59,681 in 2019. Last year, it stood at $60,073, an increase of only $392 over six years. This is a compound annual growth rate of 0.1% per year, effectively zero. All the while, the cost of living skyrocketed.
The picture is just as bad when we look at last year. While per capita GDP edged up slightly in the last quarter, the first quarter of 2026, by 0.2% quarter over quarter, the fact is that per capita GDP shrank in Q2 and Q4 last year. As a result, per capita GDP last quarter was up only 0.2% year over year, effectively zero. In other words, per capita GDP in the first year of the new Liberal government follows the same trajectory as it had under the old Liberal government.
Part of the bigger picture is not only declining GDP, but productivity. As a Nobel Prize-winning economist once said, “Productivity isn't everything, but, in the long run, it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”
The picture of productivity looks grim. When we look at Statistics Canada's annual measures, labour productivity has declined in each and every one of the last four years for which we have full-year data. Productivity dropped from $67.70 an hour worked in 2020 to $63.20 in 2024, a decline of almost 7%. Two years ago, on March 26, 2024, the senior deputy governor of the Bank of Canada, Carolyn Rogers, called Canada's lagging productivity an “emergency”. Since then, productivity appears to have flatlined, if not declined. The emergency appears to have become even more dire.
When we look at Statistics Canada's quarterly measures, business sector labour productivity declined over the last year. In the first quarter of 2025, it measured on an index of 100 at 104.7. Last quarter, it stood at 104.074, a decline of 0.5% in just one year. Under the new Liberal government, the productivity emergency has gotten worse than it was under the old Liberal government.
At this point, I will remind the House that I will be splitting my time.
When the Bank of Canada rang the alarm bells on productivity, it cited low levels of business investment as one of the root causes. Business investment has plummeted over the past decade. According to a recent analysis by Steven Globerman of the Fraser Institute, business investment in plants, capital, equipment and IP, expressed as a percentage of GDP, dropped from 13.8% in 2014 to 11.1% last year, and under the new Liberal government, the decline has continued. According to Statistics Canada's release of May 29, “Business capital investment fell 0.7% in the first quarter of 2026, the fifth consecutive quarterly decline.” Steven Globerman has called this a “business investment emergency”. We have not only a productivity emergency but a business investment emergency. The word “emergency” is not my word. This is the word of the Bank of Canada and a reputable research organization.
The fundamentals have not gotten better in the past 12 months under the new Liberal government: not on per capita GDP, not on productivity growth and not on business capital investment. In fact, in many cases, it has gotten worse. The data I cite in this speech is taken from Statistics Canada, including tables 36-10-0706-01, 36-10-0480-01 and 36-10-0206-01, unless I have specified otherwise.
In my assessment, nothing the new Liberal government has done with the new Prime Minister in the past year fundamentally changes the trajectory of the economy, and the early data that has come in over the past four quarters confirms that assessment. Canada's per capita GDP continues to flatline, if not decline. Canada's productivity continues to flatline, if not decline. Canada's business capital investment continues to flatline, if not outright decline.
That is because the government has failed to introduce the fundamental reforms necessary to turn the economy around. It has failed to introduce wholesale tax reform to our personal and corporate income tax systems. We need tax reform of the scale and ambition that we saw in 1971 or in the 1980s under the government of Brian Mulroney. It has failed to introduce fiscal reform of the scale and ambition of former prime minister Chrétien and finance minister Martin, who, in 1995, introduced a revolutionary budget that refocused the federal government and balanced the budget in 36 months.
It has failed to introduce desperately needed competition reform to address the oligopolies and the uncompetitiveness of our economy, which are making our goods unattractive for export to global markets. Export expressed as a percentage of our GDP has plummeted, from about 43% of GDP in the year 2000 to about 33% today.
The government has also failed to introduce the regulatory reform needed. We need to reduce the regulation that is strangling business investment and growth. The government implicitly acknowledged that its regulatory approach is not working. Not only has the government not used the national interest designation under Bill C-5, but it is engaged in yet more consultations to introduce yet more legislation to change its regulatory approach.
Until early April, the government could argue that it did not have the power to enact these fundamental reforms because it did not have a majority. That excuse no longer holds. The early data coming in over the past 12 months is that the new Liberal government is on the same course as the old Liberal government on per capita GDP, productivity and business capital investment. The government has a choice: to acknowledge how bad things are, reverse course and introduce fundamental reforms in taxation, competition, and regulatory and fiscal policies, or to continue to preside over Canada's continued economic decline. If the government does not acknowledge the very real and serious fundamental challenges our economy is facing, it will not fix the problem.