True Patriot Love - January 09, 2026


Canada’s GDP Drop Signals Trouble


Episode Stats

Length

35 minutes

Words per Minute

180.33052

Word Count

6,318

Sentence Count

511

Hate Speech Sentences

8


Summary


Transcript

00:00:00.000 Today on True Patriot Love, Under the Pillar Economy, I'm joined by Mike Wixson to go over
00:00:09.940 what happened in October. We saw a 0.3% decrease in our GDP, which is probably one of the biggest
00:00:17.340 GDP decreases we've seen since 2022. Hi, Mike. How's it going? Good, good. I appreciate you
00:00:24.260 you know what? I like being the guy in this seat because you make clarity of what tends to come
00:00:30.360 out in charts I don't understand out there often. So I appreciate this. Yeah, no, thanks for joining
00:00:35.480 me. You know what? It was a funny month because we remember back to October, things slowed down a
00:00:43.400 little. We were kind of at the point where we had seen the bubble from tariffs. People had gone and
00:00:50.440 stockpiled all their goods and then all of a sudden the economy started to slow. So we
00:00:56.620 particularly saw a manufacturing dip. We saw the the wood industry go. You know, we heard a lot about
00:01:02.380 remember we heard a lot about subsidizing the wood industry. That's right. Yeah. Yeah. Soft lumber,
00:01:06.800 lumber, all that stuff. So we saw that manufacturing. We talked a lot about auto product manufacturing,
00:01:13.620 how all that had started to slow down. So we saw the decline in that. And you know what? We saw the
00:01:20.240 construction industry just disappear in October. You know, we started to hear about condos, the
00:01:29.000 unwinding of the condo industry, and then boom, right? The overall drop we understood to be 0.3%.
00:01:37.740 That's an enormous drop across all these categories. For a monthly change. Yes, it is. And again,
00:01:44.640 we hadn't seen anything like that since the early, you know, 2020s. And, you know, that kind of alarmed
00:01:51.700 everyone. Now, this hasn't been something that we haven't been tracking. We haven't been talking
00:01:56.180 about because Deloitte, for example, I get a circular from them every month. They're predicting,
00:02:00.920 you know, a mild recession. I don't know. Oh, yeah. Yeah. I don't know how you classify a mild
00:02:07.960 recession. But they've been saying for a while. We're mildly pregnant. Yeah, we're mildly pregnant.
00:02:13.100 But they are saying, you know, they're expecting the bubble to burst and to get a few back-to-back
00:02:19.380 recession defined as several months of back-to-back decline in GDP. Over half the sectors that were,
00:02:26.840 I guess, polled or researched on this reported decline. 11 out of 20. Wow. So, and that's
00:02:35.680 interesting because if you look back since last October, so if you look back a year 2024, October,
00:02:42.860 and you go forward, out of those 12 months, six of those 12 months were a significant decline in GDP.
00:02:51.600 So, it's not something we hadn't seen coming. And people, again, you know, we're here, we talk so
00:02:56.680 much about the tariff impacts and what's happening with the tariffs. We've been in this malaise for a
00:03:02.220 while, right? This isn't something new that was Donald Trump related. This is something that our
00:03:06.640 economy was starting to see some bumps. So, when we got to the fall of 2024, I knew it. I started to
00:03:14.600 see it. And, you know, we were talking about it. So, it's not something that wasn't an indicator.
00:03:21.700 It's funny that it's such a slow grind, Paul.
00:03:24.240 Yeah.
00:03:24.460 Like, if in 2024, you were starting to see pretty serious indicators of this happening
00:03:29.200 month over month, and you can start to see this on the horizon, this is a couple of years
00:03:34.040 of getting to that point. It feels like maybe we've made some bad choices between here and
00:03:38.800 there, to be honest with you.
00:03:40.160 Oh, yeah.
00:03:40.500 We could have staved this off in many ways.
00:03:42.400 Well, and we did some things to actually kind of mask it. So, if you look at, there were
00:03:46.760 some months where we'd increase military spending, which would just get us back positive by like
00:03:52.260 a tiny bit. We'd increase, you know, housing subsidies, which would just get us back. So,
00:03:58.300 we'd have one really negative month, and then all of a sudden, you know, there'd be government
00:04:02.500 spending, or there'd be some program that would kick in. So, we saw a year of kind of up and down
00:04:08.740 based on the way we were managing GDP.
00:04:11.520 Well, this chart that you point out to me just a little bit earlier, and we'll put it up right
00:04:16.100 now for you to have a look at, this is an interesting one because it shows so many months that we've
00:04:21.160 dipped below the line in the last year.
00:04:23.780 Yes.
00:04:24.040 Talk to me about that.
00:04:25.180 Yeah. So, those are the six, you know, six out of 12 months that we did go below the line
00:04:29.860 that we were trying to manage through. Now, GDP. So, let's make sure, because a lot of people out
00:04:35.100 there always ask me the question, you know, what's the difference between real and nominal GDP?
00:04:38.940 So, we're talking real GDP. So, which has been inflation adjusted. So, inflation isn't impacting
00:04:45.760 the numbers. So, you know, so we're not seeing months where we have more inflation and less
00:04:51.260 inflation. That's nominal GDP where inflation's already in that. It's not adjusted out. And,
00:04:57.500 you know, GDP, for those of you kind of new to the term or, you know, just remembering it again.
00:05:03.000 Well, we hear it a lot.
00:05:04.280 We hear it a lot, but GDP is a number of sectors, right? So, whether it's services, manufacturing,
00:05:10.720 natural resources, construction. So, what they do is they basically, it's like a surveying.
00:05:18.320 They go through the key industries. They take the economic volume. So, the revenues, they compile
00:05:27.400 them. StatsCan does a really good job of doing this. They do it on a monthly basis and they basically
00:05:32.700 say, okay, I'm going to take the top 90% of an industry. So, let's take agriculture. And they
00:05:39.100 take 90% of the agricultural companies, they record their revenue for the month, and then they're able
00:05:45.560 to determine whether the industry is going up or down. Right. So, they do know a dollar value on GDP,
00:05:53.920 which is great. And they can then go from month to month and they can compare the two.
00:05:58.660 And so, it's a- When you remove the inflation from that overall number though, what does that leave
00:06:06.060 us with? It leaves us with a baseline GDP. So, basically, it leaves us with the GDPs that's
00:06:12.920 adjusted out for inflation. So, for example, say if in the agricultural industry, inflation hits
00:06:19.020 harder than in the construction industry. Okay.
00:06:21.200 Or otherwise, it takes that number out. So, it's kind of apples to apples versus apples to inflated
00:06:27.100 apples. Gotcha. Okay.
00:06:28.340 So, it takes it out. So, and that's why I like the real GDP. Now, you know, as you go through,
00:06:34.680 and I think they've talked about quite a bit over the years, our GDP continues per capita to slip
00:06:41.020 significantly. Explain that to me.
00:06:43.740 Well, so, we are kind of a group. We're part of a group. It's called the Organization of Economic
00:06:50.420 and Cooperation and Development. So, you know, the acronym is OECD. So, to make it easy,
00:06:58.440 it's developed countries. So, you know, we talk about non-developed countries and third world
00:07:02.940 countries and developed countries.
00:07:04.880 How many people are- How many countries are in this?
00:07:07.100 38.
00:07:07.860 38 countries.
00:07:08.460 Right. So, 38 countries in this. And we are, unfortunately, slipped to last.
00:07:16.260 Of 38 countries.
00:07:17.940 In the forecasted. So, the OECD is predicted between 20 and 30 will be in last place among
00:07:25.480 the developed countries for GDP growth.
00:07:29.160 Wow.
00:07:29.920 Right? So, it's a scary figure. You know, it's been something-
00:07:32.660 It's almost like we're not on that list almost.
00:07:34.900 Well, you know, and I bring it up in previous shows, and I think through what they call the
00:07:40.840 lost decade, even the finance minister, you know, Chrystia Friedland, who's now, you know,
00:07:49.240 working for the Ukrainians.
00:07:50.640 Yeah, that's right. She's a special envoy to Ukraine.
00:07:54.000 No, no, she left that job.
00:07:55.200 Oh, sorry. Oh, my apologies.
00:07:56.920 That was yesterday.
00:07:57.520 She's now actually employed by the people she gave the money to.
00:08:00.160 Yeah. So, well, that's another show.
00:08:03.040 Okay. All right.
00:08:03.780 But, so, you know, the interesting part is that the growth, our growth in GDP has slipped
00:08:10.320 to last place in the developed countries. And the real interesting part of that is that
00:08:15.620 we've not really been worried about it, which is, to me, and I've said on numerous shows,
00:08:22.260 the lost decade, even the liberal government, you know, she is the finance minister was saying,
00:08:30.140 hey, you know, time out. We got to, we got to turn, you know, we got to turn.
00:08:34.560 And they were trying to figure it out, but they weren't getting any programs in place to get it
00:08:39.440 figured out. So now we've slipped to that bottom, bottom tier. So.
00:08:44.200 Compare us to the U.S. for a minute.
00:08:45.760 Well, so, okay. So the U.S., that's interesting. Per capita. So what they do is they take GDP per
00:08:50.680 capita and they compare us to the U.S. And the U.S. has been on this sharp increase and we've
00:08:57.120 flattened off and went down. So we've, you know, we went the opposite direction. So GDP per capita,
00:09:03.680 you know, is wide. And I've talked about on other shows, almost to the point where it's,
00:09:10.180 I think, $8,000 per person per capita difference difference between the two countries. So if you
00:09:16.900 look at it in 1970, we started off on the same plane. So we were in the same position. And then
00:09:23.100 over, you know, decades, we've just constantly, we've divided, divided, divided the U.S. climbing,
00:09:29.600 we sort of stabilizing or, you know, leveling and then going down, unfortunately. So not a good
00:09:36.440 predictor. And quite frankly, it doesn't help us going into this economic climate, which, you know,
00:09:42.180 is a, as Deloitte says, will be some type of recession. Not only that, but it does seem to
00:09:46.820 add a little bit of fuel to the flames for Trump in any sort of negotiation he does. I mean, I can
00:09:52.540 almost hear him saying, your GDP is dead. You've got no GDP. Well, yeah, that's the, that's the
00:09:58.600 whole bargaining chip. Well, that's interesting because, you know, there's a couple, a couple
00:10:03.540 indicators of the cause GDP decline. So there's a number of indicators that cause GDP decline. But
00:10:10.660 one of the key ones is capital investment in your own country. And we've unfortunately managed to go
00:10:18.500 the opposite direction. So we spend more money investing in other countries than we do in our
00:10:26.240 own country. And that's, that's very bizarre. So even our CPP, which we've talked about on other
00:10:32.580 shows, 50% of that is invested in the U S and not Canada. So I looked into that. There's not
00:10:38.220 another country on earth that would invest more outside of their own country than they do. And
00:10:43.680 yeah, which is bizarre. So, so that's been kind of the challenge. Our, our, our basic, our capital
00:10:49.780 investment. So our capital investment into the country has managed to go down. So as your product
00:10:55.620 productivity decreases and your productivity is a function of labor and resources. So, and technology,
00:11:03.080 of course, in the innovative technology. So those are the kind of the three components that make up
00:11:07.900 your productivity in your country. Um, our labor, you know, our labor, uh, productivity has gotten
00:11:13.760 scarily low. We don't do any manufacturing. We don't do many manufacturing. So the level of
00:11:19.080 manufacturing do is sunk, uh, sorry to manufacturers in this nation, but you're among a really rare
00:11:24.400 group. You're in rare air if that's what you do. But if you're not, you're not manu, if you're not
00:11:28.980 manufacturing anything, you're not spending capital. So they kind of go hand in hand, right? So now I'm
00:11:34.820 not building anything or I'm not manufacturing anything. Am I going to buy machines, buy equipment?
00:11:40.360 Am I going to worry about innovation? Am I going to try to make that widget better?
00:11:44.320 Do I need to construct a new building? Do I need more warehouse space? Do I need more drivers?
00:11:49.080 Like, yeah, all of that is impacted. Well, we have done, which is interesting. So that's an
00:11:53.460 interesting one on the real estate side. We do do a lot of storage. And, uh, so we do build a lot
00:12:01.340 of things to store things. We don't build a lot of places to manufacture things. So our, our, you know,
00:12:08.260 we've seen over the years, it's come to an end, but our residential construction was a booming industry.
00:12:13.100 Oh yeah. Our commercial was a booming industry only from a perspective of storage, not a perspective of
00:12:20.480 manufacturing. So that, that was interesting. You say that in many parts of this country,
00:12:24.300 as you leave the outskirts of the core of the city and you get to the main, uh, transport areas,
00:12:30.480 we have huge warehouses. Yeah. Uh, a lot of the Amazon warehouses, there's warehouses in this country
00:12:37.240 that cover, cover square kilometers. Yes. It's remarkable. Yeah. Yeah. Well, you know,
00:12:42.980 even, uh, Mississauga by me, uh, it's amazing even over the last few years coming out of COVID,
00:12:48.740 the amount of storage that we've, we've built and you see them, I, you know, you wonder who
00:12:54.420 speculate that with me. What's in them? Why are we doing that? Are we a hub for the world for
00:13:00.020 distribution? I don't think so. Are we storing product that we're going to buy in the future?
00:13:04.520 I think we thought, well, coming out of COVID, I think we thought we had supply management
00:13:08.820 challenges. So, so I think a lot of that was just, you know, did, uh, that was the perception.
00:13:14.420 I think we built to meet a demand, uh, or a supply issue that probably wasn't there in the end.
00:13:20.940 So now I think a lot of those are sitting empty. You don't see many people around those
00:13:25.160 buildings anymore. You see them kind of vacant with 10 cars at most.
00:13:29.380 Yeah. It seems like they're just a storage space, um, on occasion.
00:13:33.840 Yeah. That's, and there's so much of it anyway. It's interesting. And I think we should take a
00:13:38.380 look at back down the road. What's, what are we warehousing in Canada that we have so much space?
00:13:43.100 Exactly. The other one, um, I wanted to bring up, and this is on the GDP front per capita,
00:13:47.780 is that when you look across the country, you know, you, we seem to think for years, we had Ontario,
00:13:54.520 uh, was a boom for manufacturing, uh, Alberta for oil and gas. So since 2019, we basically, um,
00:14:05.960 have not had a, uh, province grow above the 2% mark. So all 10 provinces, right. That we have,
00:14:17.440 have not exceeded that. There's no superstar. There's no superstar. In fact, Alberta, uh,
00:14:27.140 since 2019 has been in a negative growth. Our oil and gas business has just not been happening.
00:14:35.060 And that was, that was maybe the star actually. It was, and Ontario is slightly down. It's like
00:14:41.200 0.1% down, but it's negative. So, and you know, the East coast, except for New Brunswick,
00:14:47.440 you know, PEI is slightly up, but you know, that's not been positive either. So,
00:14:53.260 so basically across the nation, even on a localized basis, there's no real relief at any one place in
00:15:01.340 this country. No. Well, you know, that's a little frightening. It is frightening, but you know,
00:15:07.720 we've tried to do a few things. We've tried to lower interest rates. We've, you know, given credits for,
00:15:13.340 uh, manufacturing, you know, right now we're, as we talked about before the show, when we did the
00:15:18.840 budget show, we gave a lot of tax breaks. So we came out for, you know, buy equipment, invest,
00:15:25.440 innovation. Uh, we, we are trying to do things. The challenge right now is how fast will those kick in
00:15:31.080 and then where are we going to end up the next few months as we go through into the winter
00:15:36.200 when we do hit this recession in 2026, when technically we are in it. And then how deep do
00:15:43.180 we go? So that becomes the question now, is it a mild recession? It is a deep recession.
00:15:48.760 And then what does the government do? And, and if these programs, the tax credits and all these
00:15:55.860 things that we put in the budget, don't kick in and don't kick in fast enough, which I think that was
00:16:00.300 the, that was the budget sort of complaint from everyone is that it was two mile, not hard hitting
00:16:06.080 enough and we were going to hit it. And it was lengthy in delivering. Exactly. Like it was long
00:16:12.200 in the tooth by the time that they get there from the original concept. And frankly, it's an election
00:16:17.400 period. Right. But we're into it now. So we're, we're basically into it. And how do you get
00:16:22.700 productivity up? Because without people investing in machinery, innovation, we have an aging population
00:16:29.140 growth. We have a high immigration, that's not product, hasn't been productive, quite frankly,
00:16:34.660 to the country. So that's been a challenge. We haven't had a huge productivity from our immigration
00:16:39.380 groups. Um, how do you get that stimulated again? And what programs do you follow? So we started
00:16:46.320 looking into it and we said, okay, what happens? So this is an interesting thing. What do countries
00:16:51.300 do, right? When they hit, uh, our circumstance? Yeah. You can, that's, that's my next question
00:16:58.660 is like, okay, so we're here. Yeah. Can we get out of this? Is there, are there, is there a model
00:17:03.420 out there? Sure. We've, you know, five, six, five that I can count, uh, since 1961, you know,
00:17:09.660 recession, we've been in recessions before. This is a recession. That's a little different
00:17:13.340 because we're, we're kind of missing a large portion of the baby boomers. Yeah. So this is,
00:17:18.340 this is a little different. So, you know, I think we're underestimating my, my opinion.
00:17:23.760 So Paul's opinion on this is we're underestimating how deep we're going to go on this. I think this
00:17:28.180 is going to go deeper than what we thought. Since the last recession, correct me if I'm wrong on any
00:17:31.920 of this, because I'm just a, an average Canadian guy looking at the numbers. But since the last
00:17:37.280 recession, there's policies that make it different, difficult to mine. There's policies that are put in
00:17:43.240 place to make it difficult to manufacture because you could be creating pollution of some sort.
00:17:47.780 And all of this is necessary to have a protected world. And I understand, but a lot of industry
00:17:53.680 restriction has come into place in almost every sector that does manufacturing, that does resource
00:17:59.700 mining, uh, or, you know, pulls anything out of the ground. Do you think changing some of that
00:18:06.680 and our policy in this country, just with the existing industries we have could be a tipping
00:18:13.720 point for this?
00:18:14.620 Oh, a hundred percent, a hundred percent. Here's the challenge we're going to hit. So
00:18:19.300 we're going to dip. Leaders are going to have to make decisions. So whether it's cutting red tape,
00:18:25.840 whether it's, uh, internal trade barriers, we've gone too slow. So we didn't hit it. We missed it. So,
00:18:31.840 you know, we're in October, we've seen the dip. We, if we hit November, December, where the results
00:18:36.360 are going to come out shortly, we'll know. So then they'll put, you know, they'll announce it. It'll
00:18:41.220 be the, you know, the big news story of the day, which is imminent. Yeah. It'll come out and we'll
00:18:46.380 be, and a lot of people will be like, wow, you know, why are we in a recession? Well, we just kind
00:18:51.420 of explained why, here's how you got here. You know, you might want to share this with your friends
00:18:55.320 when they say, I don't know how we got here. Here's here. Well, I've got something. So now you
00:18:59.680 mentioned, uh, we've seen some examples and how they got out of there. Share some of those with me,
00:19:04.180 if you don't mind. Sure. Well, you know, some hope, some hope. Well, you know, I don't know if
00:19:08.480 it's hope, but it's, it's changing your economy. So a lot of times what, what countries do when they
00:19:13.120 hit, uh, bad recessions is number one, they have to renegotiate their loans and debt and everything
00:19:19.240 else. So like, uh, you know, I was looking just for some examples before the show and, you know,
00:19:24.320 one popped, which I had forgotten about was in the 1997 Asian financial crisis when, uh, South Korea,
00:19:31.340 uh, uh, took a bunch of loans from the IMF and they were defaulting on them. So they actually
00:19:36.940 went to their citizens and requested that people donate gold. So gold, jewelry, gold.
00:19:43.520 Wow. So, you know, everyone has to pony up. The citizens all ponied up actual gold.
00:19:48.940 They pointed up valued, sold it, and they actually raised $2 billion to stay afloat. Um, which was,
00:19:55.460 you know, that was a wake up call for a nation, like a huge wake up call for the nation to say,
00:20:01.140 you know, yeah, we're really in trouble. Like this isn't funny. So they had to get together and
00:20:06.700 they had to redevise, uh, business sectors. So one of the business sectors, which everyone will
00:20:11.380 know is Korean cars. They've done really well. So they came out of no place with that. This must
00:20:16.520 have been where, but you know, here's the nice part about what they did or the good part about what
00:20:20.660 they did. Number one, they, they started building their own cars. Number two, they took the time to
00:20:25.760 actually make sure the technology in those cars, the innovation, all the things that increased their
00:20:30.580 productivity went into those cars. And from there, they created a nation that became more productive.
00:20:36.260 So that was kind of the, that spurred them on to actually be more diligent and create an industry
00:20:42.180 that then brought them through the recession. They created formulas for creating great product.
00:20:47.500 Yeah. That they can put into other places. Yep. Yeah.
00:20:50.660 So, and then the banks know how to lend against that formula. Exactly. Investors can have reliance
00:20:56.260 on that. Yeah. The, the, the building process becomes formula. The employment process becomes
00:21:02.140 formula. A reset like that is pretty good. Okay. Guys, give me your gold. Well, and well,
00:21:07.200 here's the other thing. It, it actually is stimulated. The government stimulates it. And then the
00:21:11.860 private, private enterprise takes it and runs with it. So that's the nice part of that because
00:21:17.200 we're going to talk about this in a minute. A lot of countries don't do that. And that's
00:21:20.640 also a challenge. Um, Iceland. So 2000 to 2000, I don't remember 2008 was terrible. The
00:21:26.820 meltdown across the world, subprime mortgages, all that crazy stuff. But, uh, Iceland actually
00:21:33.300 let their financial institutions collapse, their banks collapse. So they let them fail. They basically,
00:21:39.580 uh, uh, uh, restarted, they hit the restart button. Right. And they devalued their currency and they
00:21:49.020 devalued their currency to make themselves more attractive as a trading partner. I don't know if
00:21:53.780 you remember, you know, remember the spa days in Iceland. Oh yeah. You could, I was going to say
00:21:57.660 they really, they took advantage of this in so many ways because tourism opened up, airlines opened up.
00:22:03.660 Yeah. They built a new airport, uh, international, uh, runway so that people could, it became a tourist
00:22:09.420 attraction around the world. Yeah. 200 bucks. You were in Iceland, you know, you $80 a night,
00:22:14.140 you, you know, one of the most incredible scenery, uh, locations on earth. Great coal plunges. Yeah.
00:22:20.260 Yeah. So Iceland really took advantage of it. So, you know, that's one way Australia. So let's talk
00:22:26.300 with that. So then when Australia, this was in the 2022 Australia probably did it a different way,
00:22:32.060 which didn't end up for them, did not going well at all. So they just gave cash subsidies.
00:22:38.700 So one of the things, one of the main things they did is they gave everyone 900 bucks.
00:22:43.500 And I think we learned from Justin Trudeau that quite frankly, giving cash to citizens as a pure
00:22:49.900 stimulus never works, right? It doesn't cause it's probably the goofiest idea I've ever heard in my life.
00:22:56.220 Okay. We've taken your money. Yes. At a high rate that you don't want to pay in the first place in
00:23:01.980 taxes. Uh, don't worry. We're going to give some back. What can't you work this out better than that?
00:23:07.580 Yeah. Well, and, and they took the interesting thing is the other, uh, flip side of that is they
00:23:12.780 took significant loans from China and then they actually paid them off with resources or they're
00:23:18.140 still paying them off with resources. So they kind of, uh, took their resource, the country's resources,
00:23:24.300 which were vast Australia. Yeah. And sold them basically to the Chinese in return for the loans
00:23:31.020 to bail them out of the meltdown. So they used their resources to save the nation?
00:23:41.260 Anybody? Anybody? Well, it is an interesting approach. I don't know, you know, and this is
00:23:46.620 interesting because, you know, that was in a climate where we were totally different and there were,
00:23:50.780 there was no anxiety about Western hemisphere protection, you know, and if this was happening
00:23:56.620 at another time, that would be something I'd throw on the table right away. But right now, um,
00:24:01.740 you know, on the show a few, uh, a month ago, we actually went through the national defense paper
00:24:08.140 of the United States. Um, they want nothing to do. They went to, they were basically saying they
00:24:13.900 won't allow that now. Yeah. So they won't allow, uh, an economic bailout of a country, uh, in the
00:24:20.060 Western hemisphere. Yeah. So they're time out. We're not doing that anymore. You, you will,
00:24:26.700 in that paper that they published, uh, basically you will buy your goods and resources from the United
00:24:31.980 States. You will take loans from the United States. You will partner with the United States.
00:24:35.500 That's the way they see the world. It's very interesting because Australia seems to
00:24:38.940 be doing very well with the resources right now. So whatever investment went in from whatever
00:24:43.500 countries and, uh, they are mining. Well, productivity, right? So, you know,
00:24:49.580 if you look at the pride of productivity factors by industry, mining is one of the highest. So it takes
00:24:55.420 people, it takes innovation, it takes resources, it takes machinery. It's a, it's a great stimulator
00:25:01.340 for productivity that actually stimulates GDP. So they kickstarted it after a bad, you know,
00:25:08.300 after a bad downturn and it actually stimulated growth. They also, you know, leadership wise,
00:25:13.980 um, right now they have a, they have a great prime minister, quite frankly, he's doing a really good
00:25:18.860 job. Uh, very humble, very, you know, uh, focused on the work, focused on the work, uh, not, not needing
00:25:25.980 the money, quite frankly. So doing it because he wants to better the country. So, which is great.
00:25:32.460 Germany. I remember this in 2008, right? And I, and I'm not picking, this was a weird one to not
00:25:37.900 picking on Germany, but Germany always is an interesting test case in everything. When you
00:25:41.660 read it, I always, when I, when I read the German economic stats all the time, it's so interesting
00:25:46.780 to me the way they look at things. So, um, in 2008, what they did is they basically reduced work times.
00:25:55.420 Oh, so to kind of increase, they thought that they would increase their productivity
00:26:01.500 and, uh, they didn't have enough work in the country because the slowdown
00:26:07.660 that they would actually have people work like 30 hours a week. Right.
00:26:10.940 Uh, it, it was a horrifically bad idea, um, that it turned out to have another many social
00:26:18.460 consequences. Well, yeah, I can imagine it did. People left Germany for other jobs. I mean,
00:26:23.180 they lost a brain trust and, and a talent base through it. Yeah. Uh, it, it changed the work
00:26:28.460 ethic for a period of time in Germany, as I recall. Yeah. I thought, I felt this one was a strange one.
00:26:33.900 And, uh, you pointed it out. We actually did it here. We did Ray days. Yeah. We were,
00:26:38.300 remember we were on that in Ontario at one point, we were on a path to do it. And all of a sudden
00:26:43.740 the citizens of Ontario were like, Oh, get out of here. The businesses went bananas. I'm not paying
00:26:48.540 people for, and remember the, the idea was that the businesses would pay people for the time off
00:26:54.540 and not to work. Yeah. So you would still make the same income. You just wouldn't work as much.
00:26:59.580 Yeah. And so how, and the business were like, well, how's that going to increase my product,
00:27:03.420 productivity, my profitability. I still have to hire another shift. How am I going to,
00:27:07.180 yeah. How am I going to buy capital or reinvest? It didn't make any sense. Right.
00:27:11.180 It, it, it has no philosophical economic, uh,
00:27:16.060 Yeah. Germany did support, but they did it. And, and now they're doing, you know,
00:27:19.740 now they've kind of went into, uh, government sustained programs. So, which I think are helping
00:27:27.820 the country, you know, to come back, but it's been a tough comeback for them, um, since 2008.
00:27:33.580 And they have a lot of government supported projects.
00:27:38.460 If you have debt in the country, it always seems to me that you're just building more debt.
00:27:42.540 I, I think unless you're manufacturing, unless you're doing something, unless you're producing
00:27:48.220 something, you don't really, your startup, your restart. First of all, you might not end up closer
00:27:53.900 to a recession, but even if you have to bump out of a recession, it's your resources,
00:27:59.020 your manufacturing, your price per product, and all of that, that's going to really save your country.
00:28:03.740 Yeah. Well, it's interesting. So, you know, it's how deep your recession goes. So this, this is,
00:28:08.540 you know, if you look at the lessons learned from the 1930s to 2008, you know, depression to recession.
00:28:15.580 Yeah. Um, you know, as you get deeper into your recession and closer to depression,
00:28:20.460 quite frankly, you have to stimulate those projects. So, you know, the U S you know, we saw it,
00:28:25.900 you know, 1930s, they, you know, had to actually start to build major projects, you know, the,
00:28:32.460 whether it be the Hoover Dam or roads, highways, all those good things, you know, they had to create
00:28:38.460 big, massive projects to be put people back to work, uh, and get companies moving again to jolt
00:28:44.460 the economy. So that was a huge jolt. They had to get going to get people back.
00:28:47.900 They also had a boost of immigration. They needed to get to work at that time as well.
00:28:51.420 Yeah. I mean, they, they really were in that situation where, well, but you look at Canada,
00:28:55.820 so let's stop for a minute. Cause you know, it's interesting. We have, you know, baby boomers.
00:29:01.900 We've talked about another shows make up roughly 20% of the population. So kids, you know, make up
00:29:10.220 another 15%. So that's 35 and then unemployed. So we're projecting EI to go up to 10%.
00:29:18.860 And then people who are just not on the EI role, just have left, you know, their welfare or just
00:29:26.700 left the economy. So we're right now, 50% of Canadians are supporting a hundred percent of the pie.
00:29:34.540 Yeah.
00:29:34.780 Yeah. So we're, we're kind of getting a scary, you know, that's the scary math, you know, it's an
00:29:41.900 estimate, but it's a scary, uh, projection because you're having, uh, as it surpasses the 50% mark,
00:29:49.020 you're having a very small part of the population supporting the whole pie.
00:29:52.700 So the, you know, the reason again, our productivity low is so low is that our unemployment's high,
00:29:58.620 our aging population. These are all the things that we're kind of dealing with in this country
00:30:03.340 right now that are causing GDP per capita to drop. And it's, it hasn't been right now. It's been over
00:30:10.620 time.
00:30:11.660 Yeah. It's, uh, interesting because you talk about the United States coming out of the great
00:30:16.140 depression and building these big projects. The projects that they did for infrastructure were the,
00:30:21.340 the Hoover dam and they, they, uh, you know, short up all of their national parks and they build a
00:30:26.300 highways and, and, uh, rail systems and, uh, commuter rail systems. And they really got to work
00:30:32.380 building out a country that wasn't already in the outskirts. They built train stations where there
00:30:38.460 would be towns. They built monuments that would drive Americans to want to drive across their new
00:30:43.820 highways to see this wonderful thing.
00:30:46.140 It made a huge difference for productivity. So you see, that's the leadership piece.
00:30:51.020 If you build a highway, you reduce, uh, you increase productivity because you don't have
00:30:55.820 people sitting on the highway, right? You don't have people not wanting to drive the
00:30:59.260 highway to go to work. So now all of a sudden you have more people working, more people getting
00:31:02.780 there faster. So you create methods to actually get people to their work, get people to invest in
00:31:08.700 their work, uh, logistics, getting materials to factories.
00:31:12.380 So expanding the industrial area in which your country works.
00:31:17.740 Exactly. So that's the key, right? That's the, if you look at a lot of, uh, great, uh,
00:31:22.860 rebounds from recessions, it is people who thought about actually increasing their productivity
00:31:28.140 first. And that's, that's, you know, coming through this and talking about this today,
00:31:33.500 the one thing that keeps coming to mind, we need to set us,
00:31:37.900 we need to start setting some indicators, benchmarks that we look at every month.
00:31:43.660 And we say, okay, we got to hit these because if you don't drive towards those goals for the
00:31:48.460 country, whether it be a GDP per capita growth, whether it be, uh, PPE, uh, you know, whatever
00:31:56.380 we determine that we want to look at, we need to actually set those and drive those benchmarks
00:32:01.580 forward. And by doing that, we can do similar to what they did coming out of the depression. They,
00:32:06.700 they start to drive industry back.
00:32:08.380 If you're building bridges, you've built steel companies, you've, uh, trained people for the
00:32:13.180 next project that comes in. So if you say to a Germany, we can do the bridge, uh, here, we can
00:32:19.500 build this, we can use our expertise, our steel, and our, you're already ready to go. And that
00:32:24.380 productivity of having those trained people and the, the plant built and the systems in place to
00:32:29.820 transport it, that must increase your productivity and your economy.
00:32:34.060 Exactly. And, but, and also as we do that, it's actually starting to report.
00:32:39.340 And this is, you know, we, we talked about this on another show, Mike,
00:32:43.100 it's actually the PR around doing it. You remember, you remember when they were coming
00:32:47.740 out of the great depression, the amount of PR, you know, we're building dams, we're building
00:32:52.220 highways, we're building roads. We are America, right? Remember that whole,
00:32:56.220 the new Las Vegas is now open. Yeah, exactly.
00:32:59.340 Come to Palm Springs. The highway is now here. Yeah. The route 66 is now ready to go.
00:33:05.420 Exactly. You remember those, you know, the, the advertising, the PR around those,
00:33:10.460 and that is when you get a nation kind of coming back. And so I think as we, you know, as the next
00:33:16.380 few months go by and we're going to do, uh, every month when we get the GDP results, we're going to
00:33:21.100 actually go through them. I think what we need to talk about and what we need to start focusing on
00:33:26.700 is, okay, we're here. You know, did we all want to be in last place in the, in the OECD? No. In the
00:33:33.900 developed country world, out of 38 countries, did we want to have, be projected to have the lowest GDP
00:33:39.820 growth? No, none of us wanted to do that, but we are here. How do we build it back? And what are the
00:33:45.660 plans that we have to do? And what do we recommend to the government to do? That's the other thing.
00:33:50.300 I think that, uh, even I'm hoping that this episode focuses somebody in, uh, you know, one of the,
00:33:57.340 one of the advisory, uh, research houses or, or think tanks here in this country to say,
00:34:05.500 you know what? I think Canadians are ready to focus on getting up that ladder two or three rungs
00:34:12.540 every couple of years just to get ourselves back into play. We don't need to be the top of the list,
00:34:17.500 although we were near, uh, for many years just to make our way closer to the, uh, to the top of that
00:34:24.140 list. We have to do some things. I hope that this inspires that. Thank you for doing this. I agree.
00:34:29.100 Thank you, Mike. And for those of you, we're going to be doing, uh, a show every month when the GDP
00:34:34.220 results come out from stats Canada. So please, uh, stay tuned, watch, subscribe, uh, and, and let's,
00:34:40.940 if you have any ideas. So I always say at the end of every show, you know, write us, let's talk about
00:34:46.380 it because the more creative we are, the more innovative we are, the faster we get out of this
00:34:51.340 challenge. I'm glad to know that GDP does not stand for a great deal pickles. Like I thought.
00:34:57.100 Thanks Mike.