Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Toronto’s Unemployed Population Hits 357k, Nearly 1 In 11 Workers
Canada’s largest city is experiencing a surprising employment downturn. Toronto CMA added tens of thousands of jobs in January but added far more workers—a trend that’s been consistent for a few years now. Stat Can data shows the region’s unemployed population reached a whopping 357k people in January. It was a big jump, helping to push the unemployment rate (8.7%) much higher than the national average (6.2%). Is the region just ahead of the rest of the country, or is the city about to lose its status as Canada’s economic center?
Canada’s Non-Productive Building Boom—Inflation Killed 70% of Growth
Canada is investing much more cash into construction, but the country is getting much less. Investment in construction soared 87% between April 2020 and December 2024. That sounds like a lot of cash going towards building more but unfortunately that’s not the case. The inflation-adjusted data shows nearly 70% of that growth was lost to inflation. The main takeaway? Credit expansion and subsidies can’t fix a lack of capacity and materials to accelerate construction; they actually have a counterproductive effect, making building more costly.
Canadian Consumer Insolvencies Just Saw A 2009-Like Growth Surge
Canada may not officially be in a recession, but many of its households live in one. Canadian consumers filed 137.3k insolvencies in 2024, making it the second-biggest year on record. Last year was only surpassed by 2009, when the Global Financial Crisis kicked off, triggering a wave of credit failures. The big difference, and one that makes the data even more concerning, is the fact this isn’t 2009. The global economy is NOT experiencing one of its worst downturns ever—but households are showing significant signs of weakness. A potential warning sign that problems can get a lot worse if a real global downturn actually materializes.
Canadian Banks Saw Mortgages In Arrears Jump 22% Higher
Speaking of consumer weaknesses and credit, Canada’s banks have a front row ticket to this event. The CBA reported that the country’s biggest banks have seen residential mortgages in arrears jump 22% higher from last year. This helped push the arrears rate 44% higher from the all-time low, just a little over two years ago. Many would dismiss this as just noise, but when combined with eroding employment and increased credit delinquencies—if the failures turn into a critical economic threat, it’s going to be really hard to say, “no one saw it coming.”
