Canadian GDP Driven Solely By Public Admin, Biz Growth Turns Negative

Canada’s economic growth has stalled, with the latest data from Statistics Canada showing that the country’s gross domestic product (GDP) recorded no growth in August. This flatlining trend is driven largely by a decline in private sector performance, while government spending in public administration has become the sole driver of growth.

In recent months, the private sector has shown signs of contraction, especially in goods-producing industries. Despite Canada’s rapidly growing population, the per capita GDP—a key measure of productivity per person—continues to shrink. Since 2022, GDP per capita has fallen approximately 4%, a rate unseen outside of economic recessions.

Public administration remains one of the few growing sectors, expanding by 0.2% in August, marking its eighth consecutive month of growth. This trend raises concerns, as growth is being bolstered primarily by increased government expenditure rather than private business activity or job creation in industries traditionally driving economic progress.

Economists warn this reliance on the public sector could signal deeper economic vulnerabilities. According to the National Bank of Canada, declining productivity and stagnant business growth indicate that Canada’s labor market may struggle to stabilize without significant intervention.

The bank suggests that substantial interest rate cuts might be required to stimulate private sector recovery, which could eventually stabilize both GDP per capita and unemployment rates. Canada’s economic future appears uncertain as private investment lags, leaving government spending as the primary support for economic growth.

For more on this topic, you can read the full article on Better Dwelling [here](https://betterdwelling.com/canadian-gdp-driven-solely-by-public-admin-biz-growth-turns-negative/).