After a weak 2024, robust medium-term Canadian metro growth

Overall, the medium-term outlook for Canadian metros is strong in terms of total GDP, with the country’s 10 major metros averaging 2.6% growth per year to 2028, outperforming the national average. However, five-year growth rates mask a more turbulent story in most metros. Growth in 2024 will be much slower as the current recession plays out. In contrast nearly every metro will see GDP growth surge in 2025 and 2026, before settling to a longer-term equilibrium by 2028.

What you will learn:

• We do not expect employment to suffer as much as GDP in the coming quarters, partly reflecting rapid population growth due to inward migration. However, we forecast that the unemployment rate will rise and the participation rate will fall in most metros this year.
• Indeed, population growth will continue to be a major story in most Canadian metros in the medium term, reflecting elevated government targets for international immigration. We forecast population growth to remain above historical averages for the next few years, before returning to a longer-run equilibrium by 2028. Unsurprisingly, Canada’s largest metros will experience some of the fastest population increases, with Calgary leading the pack over the next five years.
• But while population growth has benefitted many metro economies during the recession, the figures look less positive when considering them on a per-person basis. Nationally, Canada has been in a GDP per person recession since mid-2022. In nearly every metro, we expect population growth to exceed GDP growth over the next two years, including in Toronto and Vancouver.