Canada and Australia have resorted to “quantitative peopling” to give the illusion of growth while individual living standards are collapsing.
Canada has recorded its largest population expansion in history, with nearly 1.3 million people added over the past year, almost all via net overseas migration:
While this massive population expansion has kept Canada out of a technical recession, GDP per capita has collapsed and is now tracking at similar levels to a decade ago:
On Friday, the National Bank of Canada (NBC) released research on Canadian retail sales, which are growing slowly in aggregate terms but collapsing in per capita terms:
“The picture is even gloomier when accounting for population growth, with real retail sales contracting 4.5% annualized on a per-capita basis”, the NBC economists wrote.
“Monetary policy has clearly had an impact on consumers as witnessed by the noticeable downward trend in real per capita retail spending since the first increase in the overnight rate”.
“The decline has been widespread and even looking at figures on a purely nominal unadjusted for population growth basis, discretionary spending (excluding food/beverages, gasoline and health/personal care) has reached its lowest point in 18 months”.
“Not exactly a corollary of a robust consumer”, they wrote.
The situation is similar in Australia, which has also grown its population at a record pace on the back of net overseas migration:
While not as bad as Canada, Australia’s GDP per capita growth has collapsed:
Australian retail sales volumes have also collapsed in the face of high interest rates and the cost-of-living crisis, with discretionary retailers hit hardest.
The annual change in retail sales has been negative for the past five quarters. Outside of the pandemic, only four other quarters have seen negative yearly growth since the 1980s.
Even worse, retail volumes per capita (-0.9%) declined for the ninth consecutive quarter, down 3.0% from the same time last year.
Both Canada and Australia are Ponzi economies reliant on an ever-expanding population to drive growth rather than growing productivity.
And living standards in both nations are suffering as a result.
