 Monday, February 24, 2025 | | | Welcome to Mind Your Business ! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong | | |  | Canada's per capita GDP has been falling for six straight quarters. (chayanuphol/Shutterstock) | | | Numbers out this week will show just how precarious a footing Canada's economy is on as it braces for a trade war.
GDP growth has been meagre at best for a while now.
GDP expanded by 0.3 per cent in the third quarter (July, August and September) after rising 0.5 per cent in the first two quarters of the year.
This week's numbers will tell us how the year ended. We know the economy contracted slightly in November, but rebounded a touch in December.
But it's a fair assessment to say the economy isn't exactly humming along right now.
To be clear, the economy is still growing. It has not slipped into a recession.
A recession is defined as two back-to-back quarters of negative economic growth. That hasn't happened. But economic growth is weak. And there's a reason so many people feel like we are in a recession.
One way of calculating that is per capita GDP. And that has been in decline for a while now. Six straight quarters have seen a decline in per capita GDP.
Worse yet, Canada's per capita growth rate has diverged sharply from the United States over the past 10 years. | | |  | | | | | That means Canada has less cushion to absorb any external shocks.
With the first in a series of deadlines for American tariffs rapidly approaching, Canada needs all the cushion it can get.
So, here's some good news: The per capita side of the equation is set to improve this year.
The Bank of Canada's most recent forecast didn't try to calculate what a trade war would do to its assumptions. In absence of tariffs, it found the economy would grow slightly in 2025, at the same time population growth was set to slow.
"On one hand, growth in GDP per person strengthens in 2025. Per-person household spending is the main factor behind this strengthening, reflecting the effects of lower interest rates as well as rising incomes and household wealth," wrote the central bank in its Monetary Policy Report.
Statistics Canada has reported that Canada's population reached 41.5 million in October. It found population growth was rising at a 2.3 per cent pace.
But now, that pace is expected to slow to 0.5 per cent this year.
So, GDP per person appears set to rise for the first time since early 2023. |  | | | Now, that forecast comes with a hefty caveat. If Donald Trump makes good on his threats and starts actually imposing tariffs, the economy will take a hit.
How much of a hit depends on what's tariffed and at what rate. It depends on how Canada responds and what reciprocal tariffs will be put in place on this side of the border.
It also depends on what happens with the Canadian dollar. If the loonie falls, that will make exports more attractive even if there are tariffs and could blunt the impact.
All this to say, we don't know what the road ahead is going to look like. But the GDP numbers we get on Friday will give us at least some sense as to the strength (or weakness) of the economy as we wait for the latest salvo from the White House.
What do you think will happen?
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forwarded to you. | | |  | | We'll get a look at Canada's GDP figures this week. On Friday, we'll get the monthly numbers for December and the full quarterly numbers to close out 2024. | | | | | | This week, fresh figures will shed some light on the state of the federal government's books. The Current Accounts numbers will be released on Thursday. | | | | | | G20 finance ministers and central bank governors will be meeting in South Africa starting Monday. The U.S. says it will not attend the meeting, in its first major snub of the global financial organization. | | | | | Three things to read, watch and listen to this week | | |  | The Thinking Game offers a rare glimpse inside one of the world's biggest AI labs. (CitySpeak Films)) | | | 1. The Thinking Game | | | I've spent a lot of time in these pages talking about artificial intelligence and where it may be headed from here.
A new documentary looks to be about as comprehensive a look inside the AI industry as we've seen.
The Thinking Game chronicles the story of Demis Hassabis, founder of DeepMind, the AI powerhouse acquired by Google.
In fact, Hassabis approached filmmakers Greg Kohs and Gary Krieg with a unique proposal. He offered to let them document the research his teams were performing at his AI lab in London.
"This wasn't a conventional project. We'd be filming sensitive research and storing it securely. Someday, our work might be unearthed, providing future generations a glimpse into the development of artificial general intelligence," Kohs wrote on the film's website.
It was a tough decision, he said, as it could mean years of work that may never result in something they could share publicly.
Kohs says Hassabis asked them a simple question.
“If you could go back in time and document the Manhattan Project, how would you do it?” Kohs says he was asked.
"The question both excited and scared the hell out of us. Demis clearly knew something extraordinary was unfolding."
The documentary follows the specific research that's using AI to dig into something called protein folding, a long-standing problem in molecular biology.
That breakthrough lies at the heart of the film and earned Hassabis and his DeepMind colleague John Jumper half of the 2024 Nobel Prize in chemistry.
The film premiered at the Tribeca Film Festival. It's currently playing in select theatres around North America, with a streaming deal yet to be signed.
Check out the trailer for The Thinking Game here. | | | 2. Real-life Succession | | | The unravelling of the Murdoch clan has been something to behold.
Rupert Murdoch has built one of the most powerful and successful media empires in the history of the world.
Through his company News Corp, Murdoch owns or controls Fox News, The Wall Street Journal and the New York Post and the book publisher HarperCollins, along with hundreds of newspapers and TV stations. He sold off control of 21st Century Fox in 2019.
He's amassed one of the biggest fortunes the world has ever seen. He's wielded political power, throwing his considerable weight behind Brexit and the candidacy of Donald Trump.
But controlling the Murdoch family has proven to be a more difficult task.
I was pitching in as guest host over at the CBC Radio show The Current last Friday. We did a segment with McKay Coppins, a staff writer at The Atlantic who penned an amazing article about the bitter feuds tearing the Murdoch family apart.
The piece weaves together the history of the family and lays out the internecine battles between Murdoch's two sons James and Lachlan.
For a family so embedded in the worlds of media and broadcasting, the Murdochs have always been notoriously tight-lipped, almost never granting interviews.
But James Murdoch, once the heir apparent and now the sidelined black sheep, spoke with Coppins in dozens of interviews spanning more than a year.
They discussed the past and the future and the fallout from a lawsuit that pitted the two sons against each other for control of the News Corp. empire.
Rupert Murdoch tried to go back on an irrevocable trust that would have given each of his four children an equal vote in the running of the family business when he died.
The judge refused. The kids will eventually take over. Rupert Murdoch is now 93, so that day will come soon.
Coppins's piece captures just how broken the family is after years of infighting and betrayals.
"For decades, James realized Rupert had tried to turn his children into vehicles for dynastic ambition — walking nodes of immortality. In the process, he’d wrecked the family. Now, at 52, James seems as if he is trying to disentangle himself from the character he once played in the Murdoch story," writes Coppins.
I asked him if he thought James would ever be able to disentangle himself from that character.
Coppins said he hoped so, but added just how hard that has proven to be thus far.
The piece is great and I hope you enjoy my conversation with Coppins.
Listen to my interview with McKay Coppins here.
Read McKay Coppins's piece in The Atlantic here. (paywalled) | | | 3. Understanding Canada's energy infrastructure | | | There's never been a better time to understand how we move energy products around Canada.
There is a network of pipelines that run in weird and sometimes counter-intuitive directions.
Whenever I'm trying to get my head around how Canadian energy works, I usually turn to Peter Tertzakian and Jackie Forrest from the ARC Energy Research Institute.
Their podcast ARC Energy Ideas is always smart and insightful.
This episode explores Canada's longstanding issues around Canada's energy security (or lack thereof).
They point out that right now, Ontario gets all its crude through a pipeline that carries oil from Alberta, under the Great Lakes and into Ontario. That same pipeline supplies Quebec with about 60 per cent of its needs.
The problem is that line runs through the United States. It moves south and east from Manitoba, and cuts through Wisconsin and Michigan before emerging again near Sarnia, Ont.
"The concern [is that] in the worst-case scenario, [the Americans] have the ability to stop all crude oil coming into Ontario," said Tertzakian.
There has been a lot of talk around reviving the Energy East pipeline, which would have remained in Canada and run crude from Alberta to refineries in New Brunswick.
There are a whole host of issues with that plan — least of which is that the company that initially proposed it no longer owns the infrastructure that was going to be used.
Forrest and Tertzakian also discuss the time Canadian oil companies chose to ship oil from the West Coast to refineries on the East Coast.
After the oil shocks in the 1970s, countries were hoarding oil and options were limited.
"We leased some Greek tankers and those Greek tankers took the oil through the Panama Canal all the way around the east coast of Florida and up the coast and delivered to Canada by ship," said Tertzakian.
It was a journey of more than 14,000 kilometres.
In fact, he says, Cenovus and Irving did it again in 2020, shipping all the way down through the Panama Canal.
Shipping oil can be done for as little as $2 per barrel.
"It's actually probably cheaper than the cost, even amortized, of building a pipeline," he said.
It wouldn't do much for Canada's energy infrastructure, but it would give Canadian refineries more options if the trade dispute with the U.S. gets worse.
It's just one interesting tale among many told in this great episode. Give it a listen.
Check out ARC Energy Ideas here. | | | How the economy looks beyond Bay Street | | | America's trucks | | | For nearly 50 years, the best-selling vehicle in the United States has been the F-150 pickup truck.
And for the last 25 years, America's obsession with bigger trucks and SUVs has grown sharply.
But a new report shows that dominance may be coming to a close.
A piece in the always wonderful Chartr newsletter cites a report from dealership merger specialists Dave Cantin Group and Kaiser Associates.
“Consumer preferences are finally moving away from trucks and SUVs toward more affordable sedans, driven by concerns over vehicle affordability," found the report. | | |  | Check out the full article here.
"With the average price of a new truck hovering around ~$60,000 US, compared to $39,233 US for cars, the bang for your truck buck just doesn’t quite cut it like it used to for inflation-weary consumers," wrote data journalist Claire Yubin Oh.
What do you think?
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