Mar 6, 20246.5 min readWhile interest rates have gone up at about the same pace in the U.S. and Canada, the associated drag on the economy has clearly been more pronounced this side of the border. Just look at what happened last year as Canada’s GDP growth was restricted to 1.1%, well below the 2.5% growth print stateside. The performance gap was entirely due to domestic demand, particularly interest-rate-sensitive components of GDP, namely housing, consumption spending and business investment. And with rates likely to stay elevated for a while, it’s difficult to see Canada making up lost ground on the U.S. in 2024. On the plus side, continued U.S. economic expansion should translate into decent exports for Canadian Ag producers and food and beverage manufacturers.Heavier debt service burden in CanadaNobody should be surprised that high interest rates bite harder this side of the border. Canadians not only have higher debt loads than Americans but that debt also renews more regularly e...
