BC STORIES

Stalling Growth: Canada’s Economy Shrinks at End of 2025 as Rate Cut Pressure Mounts

Canada’s GDP shrank at the end of 2025 as businesses cut inventories. Discover how this impacts the Bank of Canada’s rate cut timeline and 2026 growth.

Published

on

The 2025 Economic Cold Snap

The Canadian economy experienced a sharper-than-expected cooling at the end of 2025, leaving policymakers and investors scrambling to recalibrate their expectations for the coming year. Data released today reveals that the national Gross Domestic Product (GDP) contracted during the final quarter, a move largely attributed to a significant reduction in business inventories. This trend of “destocking”—where companies sell off existing goods rather than producing or importing new ones—acted as a significant drag on economic output, offsetting gains in other sectors.

Understanding the Inventory Impact

Economists point to the inventory drawdown as a sign of business caution. After several years of supply chain volatility, many firms had built up substantial cushions of stock. As consumer demand softened throughout the latter half of 2025, businesses prioritized clearing these backlogs to improve cash flow and reduce carrying costs in a high-interest-rate environment. While this process is technically a subtraction from GDP, some analysts view it as a necessary correction that sets the stage for future growth when restocking eventually resumes. However, the immediate impact has been a cooling of the headline growth figures that far exceeded analysts’ initial fears.

The Bank of Canada’s Policy Dilemma

The latest figures place the Bank of Canada (BoC) in a delicate position. For months, the central bank has maintained a holding pattern, waiting for clear evidence that inflation is sustainably returning to its two percent target. However, the current growth trajectory for the first quarter of 2026 is trending at approximately 1.0 percent, significantly underperforming the BoC’s own forecast of 1.8 percent. This underperformance suggests that the economy is cooling more rapidly than anticipated, potentially opening the door for rate cuts sooner than the mid-2026 consensus previously held by many market participants.

Expert Perspectives on Growth and Rates

Andrew Grantham, a senior economist at CIBC, noted that while today’s data might not be enough to move the central bank immediately, the outlook is shifting. Grantham highlighted that any negative trends in the job market, which has so far remained relatively resilient, would be the likely catalyst for a change in the BoC’s thinking. Similarly, Douglas Porter, chief economist at BMO, described the current growth as “mild” at best, suggesting that while the door to rate cuts is “slightly ajar,” the central bank is not quite ready to walk through it just yet. The cautious tone from the BoC reflects a fear of cutting too early and reigniting inflationary pressures, particularly in the housing market.

Silver Linings in the Revision Data

Despite the weak finish to 2025, the report offered some positive news in the form of historical revisions. The GDP figures for the second quarter of 2025 were revised from a -1.8 percent contraction to a much shallower -0.9 percent. Dominique Lapointe, director of macro strategy at Manulife Investment Management, pointed out that these revisions mean the economy was actually on firmer footing heading into the second half of the year than previously understood. This revision effectively aligns the total size of the Canadian economy by year-end with earlier, more optimistic forecasts, despite the fourth-quarter stumble.

A Cautious Outlook for 2026

As Canadians look toward the remainder of 2026, the economic narrative remains one of caution. Consumers, squeezed by the lingering effects of high debt-servicing costs, have pulled back on discretionary spending. This was evident in the third-quarter data, which was also revised downward to 2.4 percent annualized growth from 2.6 percent. Economists described that period as a “mixed bag,” where growth was artificially supported by a drop in imports rather than a surge in domestic productivity. For the average Canadian household, the primary concern remains whether the current slowdown will translate into broader job losses or if the economy can achieve the elusive soft landing that the Bank of Canada has been aiming for.

Continue Reading

BC STORIES

Why a Former Island Mountie Received a Conditional Discharge After Court Hearing

A former Vancouver Island RCMP officer was granted a conditional discharge with 18 months probation after pleading guilty to breach of trust in Nanaimo.

Published

on

Conditional Discharge Handed Down in Nanaimo Court

A former Vancouver Island police officer who had a sexual encounter with a vulnerable woman following his shift will avoid a criminal record if he successfully completes an 18-month probation sentence.

Mark Tyler Hilland, 47, received a conditional discharge in B.C. provincial court in Nanaimo from Judge Reginald Harris on Friday, Sept. 11. Hilland had previously entered a guilty plea to breach of trust by a public officer in relation to a July 2, 2024 incident.

Details of the Offence and Court Findings

According to an agreed statement of facts, Hilland was completing paperwork in his service vehicle when he was approached by an Indigenous woman with whom he was acquainted. Her identity is protected by a publication ban. Unknown to Hilland at the time, she had prior involvement in the sex trade.

After Hilland left for an assignment, the woman was propositioned by another man for sex—an interaction described by Crown counsel Andrew McLean as negative and triggering traumatic past memories. Though she reported that encounter to police, Hilland was unaware of her report.

Later that evening, Hilland noticed she appeared distressed and asked how she was feeling. During their conversation, she exhibited flirtatious behavior and gave him her address, phone number, and door code, inviting him over once his shift ended. Following his shift on July 3, 2024, Hilland called her, visited her residence, and the two had consensual sex.

When they met again later, Hilland called the encounter a mistake and stated he would no longer contact her. Although she initially accepted this, she yelled an obscenity as he drove away and reported his actions to the Nanaimo RCMP.

PTSD Diagnosis and Impact

The court heard that Hilland was diagnosed in 2019 with post-traumatic stress disorder, alongside depression, mood alterations, and sleep difficulties. Before this event, he had served in high-crime or demanding posts, including Fort St. James and Gabriola Island, and responded to most critical incidents while stationed in Nanaimo.

Judge Harris determined that Hilland was suffering from PTSD during the incident, concluding that without the disorder, he would not have engaged in the impulsive and self-destructive behavior. While Crown counsel sought a suspended sentence that would entail a criminal record, defence counsel Brad Kielmann argued for a conditional discharge.

In granting the discharge, Harris noted Hilland’s lack of a prior criminal record, good character, and the severe impact a record would have on his employment. Harris ruled that a discharge was not contrary to the public interest despite the harm caused to the community and the woman’s vulnerability.

Probation Terms and Departure from Force

The victim did not submit a victim impact statement but told police she feared Hilland might return, experienced sleep disruptions, and worried about her parents’ reactions, noting it took a year to feel like herself again.

Under the conditions of his 18-month probation order, Hilland is forbidden from contacting the woman and must write a letter of apology to be delivered through his probation officer. His employment with the RCMP officially ended on Aug. 14 when he was discharged.

Continue Reading

BC STORIES

BC Conservative Defector Teresa Wat Joins New Provincial Party Caucus

Teresa Wat joins Peter Milobar’s new provincial party as its sixth member, creating B.C.’s third-largest legislative caucus following Conservative departures.

Published

on

Expanding New Party Becomes B.C.’s Third-Largest Caucus

Richmond-area MLA Teresa Wat has joined the newly formed provincial political party established by former Opposition finance critic Peter Milobar. Wat becomes the sixth member to join the still-unnamed group, which will form the third-largest caucus in the British Columbia legislature behind the NDP and the Conservatives when the assembly reconvenes next month.

Milobar, who serves as the interim leader, stated that Wat’s addition on Friday demonstrates growing momentum for a serious right-of-centre alternative aimed at addressing concerns over government spending and sector declines under the current New Democrat administration.

Tensions Lead to Conservative Departures

The party’s membership is composed entirely of former provincial Conservatives who left the caucus in recent weeks amidst dissatisfaction with party leader Kerry-Lynne Findlay. Nine legislators in total have resigned from the Conservatives following Findlay’s narrow leadership victory in May, with some critics suggesting the party has moved too far to the right and imposed rigid political purity tests.

Wat originally announced her resignation from the Conservative caucus on Aug. 26, pointing to unaddressed accusations made by Findlay that questioned her allegiance to Canada. Findlay later held a private meeting with Wat to apologize directly for the comments, while also characterising Wat’s departure as a betrayal of local campaign workers and supporters who backed her during the 2024 election.

Legislative Ranks Grow Ahead of By-Election

Wat, who was first elected to the B.C. legislature in 2013 as a member of the BC Liberals, explained that her decision to join Milobar’s caucus stems from a desire to offer a credible, unified alternative focused on affordability and competent governance.

Milobar and fellow defector Ian Paton initially launched the party last month after quitting the Conservatives. Their caucus expanded last week with the additions of Rosalyn Bird, Bruce Banman, and A’a:liya Warbus before Wat’s joining. These political shifts come just ahead of a Sept. 26 byelection in Abbotsford-Mission, which will decide whether Findlay secures a seat in the provincial legislature.

Continue Reading

BC STORIES

Why Revelstoke Leaders Are Demanding Immediate Highway 1 Safety Changes

Politicians push B.C.’s transport minister for urgent Highway 1 safety upgrades between Sicamous and Revelstoke following three fatal crashes.

Published

on

Elected Officials Demand Urgent Highway 1 Upgrades

Following a recent series of collisions between Sicamous and Revelstoke that resulted in three deaths and at least six injuries within 68 hours, provincial and federal representatives are urging swift government action to improve safety along the Trans-Canada Highway corridor.

Columbia River—Revelstoke MLA Scott McInnis and Kamloops—Shuswap—Central Rockies MP Mel Arnold sent separate letters on Friday, Sept. 4, to B.C. Transportation and Transit Minister Mike Farnworth. Both elected officials are pressing for accelerated four-laning of the stretch between Chase and Alberta, while calling for near-term measures to address growing safety concerns from commuters, truck drivers, visitors, and residents.

Increased Enforcement and Infrastructure Proposals

McInnis highlighted that travellers and families rely heavily on the corridor but are increasingly fearful due to dangerous road conditions. Characterizing the highway as one of the continent’s most hazardous stretches, he urged the province to immediately bolster BC Highway Patrol and RCMP enforcement between Field and Sicamous to curb aggressive driving, speeding, tailgating, and distraction. He noted that existing detachments in Revelstoke and Golden-Field are currently stretched thin.

Alongside increased police presence, McInnis recommended improved incident response capacity, enhanced traffic management, a review of commercial vehicle compliance, and extra safe passing lanes. He is scheduled to meet directly with Farnworth on Sept. 23 to push for firm commitments, calling the corridor safety his top constituency priority, and intends to hold local town halls in Revelstoke and Golden.

Federal Perspective and Ministry Response

Arnold noted that he has advocated for widening the predominantly two-lane highway and securing federal funding since 2016. While acknowledging the difficult terrain along this section of Highway 1, he stated that traffic volumes continue to rise and that persistent collisions and fatal crashes should not be accepted as permanent reality.

In a statement, the Ministry of Transportation and Transit expressed that every highway fatality is a tragedy and affirmed its commitment to reliability, safety, and capacity expansion. The ministry stated that 125 kilometres—or 37 per cent—of the Highway 1 corridor under provincial jurisdiction between Kamloops and Alberta has been four-laned to date. It added that it is collaborating with ICBC to curb accidents, noting that while infrastructure investments like four-laning reduce head-on collision risks, overall road safety also relies heavily on vehicle condition and driver behaviour, such as observing speed limits and road conditions.

Continue Reading

Trending