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Alongside the Vancouver edition of the rennie landscape, our intelligence group also produces editions for the Victoria and Kelowna markets. Read them at the links below.
Victoria editionKelowna edition01. economy
a two-year lull
The labour market in Canada has been undergoing a slow and steady deterioration for the past couple of years. It shouldn’t be terribly surprising that hiring has suffered during the recent period of generationally-high interest rates that we’re just now coming out of. What's more, this came in tandem with record population growth of 744,000 in 2024 and 1.3 million in 2023. So even though we were adding jobs nationally over that period (919,000 over the past two years), hiring was not able to keep pace with labour force growth leading to an unemployment rate that has been slowly but surely rising.
Looking at the national unemployment rate on a rolling 12-month average (to smooth out the month-to-month volatility of the labour force survey data), the average has risen from an all-time low of 5.1% in May 2023 to 6.5% as of February. While we've experienced periods of much greater increases, like during the onset of the pandemic and during the Great Recession, all of the other periods of a sustained and rising unemployment rate over the past 45 years have come at the hands of a major economic shock. This current period stands alone in that respect. Although we haven’t had much GDP growth in the past two years, we've managed to avoid a technical recession while at the same time experiencing what's been dubbed a "per-capita" recession.
Seattle editionDespite the absence of a recession, Canada's unemployment rate has been steadily rising for the past two years. History suggests this is anomalous.
TRENDING IN THE WRONG DIRECTION
DATA: UNEMPLOYMENT RATE, MONTHLY, ROLLING 12-MONTH AVERAGE, 1980-2025, CANADA
SOURCE: STATISTICS CANADA LABOUR FORCE SURVEY
The good news for the Canadian economy is that even with this sustained rise in the unemployment rate, it remains historically quite low. Today’s 12-month average of 6.5% is still lower than it was for much of the past decade, including the entire period from January 2010 through October 2017 when the labour market was recovering from the financial crisis. A major factor in our downward-trending unemployment over the past few decades has been demographic forces, which we'll explore next.
(almost) everyone gets one year older every year
An aging population, like we have in Canada, has major implications for how we fund our services. While our dependency ratio has been falling for decades, changes to the components have not been favourable.
Canada has had a below-replacement level birth rate since the 1970s, which, against the backdrop of aging baby boomers, has dramatically shifted the country's age composition over the past 50 years. One consequence of this has been a transformation in Canada's youth and senior dependency ratios: the proportion of dependents (youth and seniors) to the working-age population. Indeed, over the past five decades, the youth dependency ratio has declined, by almost half, driven by a lower birth rate. Conversely, the senior dependency ratio has more than doubled, fueled by increased life expectancy and the aging baby boomer generation. This shift places growing pressure on health care and social services with more seniors drawing on them but fewer youth to help future funding.
Looking ahead, our baseline forecast for the next 50 years projects a continued rise in the senior dependency ratio. The youth dependency ratio will likely decline further, and the overall dependency ratio will rise. This is why immigration—and its distinctly working-age profile— is critical to Canada’s future, as we support our dependents through a growing economy and labour force.
THE AGE-OLD QUESTION: WHO WILL WE DEPEND ON?
DATA: RATIO OF YOUTH AND SENIORS PER 1,000 WORKING-AGE PEOPLE, ANNUAL, 1975-2075, CANADA
SOURCE: STATISTICS CANADA, TABLE 17-10-0005-01 & RENNIE INTELLIGENCE POPULATION MODELS
I’m not sure the last time I was this uncertain
Political and economic uncertainty have soared so far this year due to factors both foreign and domestic in origin. Volatility in the bond and stock markets, however, has been comparably muted.
The early part of 2025 has already given us all collective whiplash as we seek to make sense of the latest political and economic developments. Much of the uncertainty we’re currently facing stems from our neighbours to the south and their monthly schedule of tariff threats followed by one-month reprieves. Plenty of uncertainty has originated within our own borders, too, with a Prime Minister's resignation, prorogued parliament, leadership race, and upcoming federal election.
With all this uncertainty, it’s worth trying to quantify it, along with its effects on markets. According to the policy uncertainty index, which has skyrocketed to new heights, we're in uncharted territory. According to bond and stock market volatility (or relative lack thereof ), markets haven't reacted as much. Stock market volatility in Canada, per the TSX VIX, has been on a downward trend since peaking during the early days of Covid and is now lower than it was in 2019. Bond market volatility—per the MOVE index which measures US treasury volatility—meanwhile has declined in 2025 after being elevated the past two years due to high inflation and high interest rates. While each of these indices show varying levels of volatility, clarity on the path forward would be beneficial for everyone.
VARYING DEGREES OF UNCERTAINTIES
SOURCE: WWW.POLICYUNCERTAINTY.COM, S&P DOW JONES INDICES, BLOOMBERG
DATA: CANADA POLICY UNCERTAINTY INDEX, S&P/TSX 60 VIX INDEX, AND ICE BOFAML MOVE INDEX, MONTHLY, 2019-2025, ALL INDEXED TO JANUARY 2019
a tariff-ying new policy
US tariffs on imports from Canada have now been implemented. While the effects will vary by province, trade with the US is critical as they receive three-quarters of Canada's merchandise exports.
The US has long been Canada’s largest trading partner. Our closest neighbour, which has historically been an open economy, with a customer base ten times the size of our own, made for an attractive destination for our exports. But times have changed. As of writing, Canada is subject to almost blanket tariffs of 25%, except for energy, which is tariffed at 10%. Canada’s reliance on US customers has left us exposed as these tariffs take effect, for an unknown duration.
Here in BC, we have the second-lowest share of exports going to the US of any province—though still more than half—as we have a geographic advantage which allows our exports easier access to Asia. Alberta and New Brunswick are the most exposed at 89% and 90%, respectively, and while 82% of Alberta's exports to the US come in the form of energy, which are tariffed at a lower rate, they have the second-largest provincial export total as their economy heavily relies on trade.
These tariffs will likely mean a substantial reduction in demand for Canadian exports in the short-term, though this will vary by sector. Finding new customers and diversifying our trade are good ideas, but will take time to implement. Meanwhile, these tariffs will have a major impact on Canadian producers for as long as they are in effect.
SOUTHERN EXPOSURE
DATA: TOTAL MERCHANDISE EXPORTS AND SHARE OF MERCHANDISE EXPORTS TO USA, BY PROVINCE, 2024
SOURCE: STATISTICS CANADA, TABLE 17-10-0005-01 & RENNIE INTELLIGENCE POPULATION MODELS
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Disclaimer: This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy.
Disclaimer: This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy.
Disclaimer: This is not an offering for sale. Any such offering can only be made by way of disclosure statement. E&OE. The developer reserves the right to make changes and modifications to the information herein without prior notice. Photos and renderings are representational only and may not be accurate.
Disclaimer: This is not an offering for sale. Any such offering can only be made by way of disclosure statement. E&OE. The developer reserves the right to make changes and modifications to the information herein without prior notice. Photos and renderings are representational only and may not be accurate.
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