🤔 So what exactly is a me-cession?

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✍ What’s on our mind?

Just two weeks ago, we wrote about Canada’s GDP growth, which defied expectations by ticking up 2.2% in the second quarter. But while the overall economy seems to be chugging along, there's an interesting twist to the tale: enter the “Me-cession.”

So, what’s a “Me-cession,” you ask? It’s a term capturing the odd disconnect between the aggregate economic performance and individual financial experiences. Despite dodging a recession and seeing a steady GDP increase, many Canadians are tightening their belts as if they were in a downturn. We're seeing a paradox where collective spending is rising, thanks largely to a surge in population, while personal spending per capita is on the decline.

Canada’s population boom—fueled by non-permanent residents—has been a lifeline, boosting consumer demand and propping up the economy. Without this demographic lift, we’d likely have faced a recession late last year. However, this influx has also strained housing markets and public services.

Looking ahead, the federal government’s plan to reduce the number of non-permanent residents will slow population growth, which could dampen economic momentum. As the rate of new residents slows, so too might the overall demand for goods and services, challenging the economy’s growth trajectory.

For investors, the “Me-cession” underscores the importance of balancing optimism with caution. While the broader economy shows resilience, individual spending remains subdued. With the Bank of Canada likely to cut rates to support the economy, staying adaptable and informed will be crucial. The path ahead may be slow, but with strategic adjustments and an eye on sectors, investors can navigate this peculiar economic phase and seize emerging opportunities.

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✍ Expert opinion

Kate Grant and Will Shaw | Fasken

⚖️ On the role of a law firm within the ecosystem: Emerging tech founders are highly creative and they’re working with tech on the cutting edge. We try to be pragmatic about counseling companies. We want to protect our clients but we understand our they need to take risks. Now what we focus on is helping clients understand that risk and work creatively to achieve the business objective while also complying with applicable laws.

🤝 On building relationships with key stakeholders: Part of it is getting to know the people you’re partnering with. It’s 50% business and 50% life. So get to know them. If you can figure out what their key inflection points are, it’s a way to keep them - but also you - memorable.

📜 On advice for startups formalizing their business: One of the starting points in incorporating your business is understanding that a regular business and a VC-backed business look different from a legal perspective. That’s why it’s important to start thinking about the growth path for the business. You have to understand what works for your business. Then, we can help put in place the right tools with leverage at different stages to ultimately get you to that end goal.

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