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.

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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.

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BC STORIES

BC Supreme Court Judge Set to Rule on Sentence Length for Former Gang Member

Defence lawyers recommend 12 to 14 years for Ekene Anigbo for the 2021 Naramata manslaughter of Kathleen Richardson. A judge rules Nov. 2 in Kelowna.

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Judicial Decision Expected in November

B.C. Supreme Court Justice Alison Beames is scheduled to deliver a sentencing ruling on Nov. 2 regarding Ekene Anigbo following a two-day hearing in Kelowna.

Defence lawyers for the 27-year-old former gang member have asked the court for a term of 12 to 14 years. Anigbo was convicted of manslaughter on Aug. 14 in connection with the June 9, 2021 death of 57-year-old Kathleen Richardson inside her Naramata residence.

Dispute Over Rehabilitation and Penalty

The recommendation from the defence directly contrasts with the prosecution’s request on Oct. 7 for life imprisonment without parole eligibility for 10 years. Defence counsel argued that the Crown was seeking to artificially inflate the sentence, pointing out that Anigbo has ended his gang ties since 2024 and completed anger management, employability skills, and Indigenous programming at Okanagan Correctional Centre.

If Justice Beames adopts the defence proposal, Anigbo would become eligible to apply for parole after completing one-third of the sentence.

Details of the Fatal Incident

Anigbo was originally tried for first-degree murder, but Justice Beames determined the Crown did not prove beyond a reasonable doubt that he fired the lethal shots. However, court proceedings established that Anigbo and co-accused Jalen Falk entered the home together armed with at least two handguns to track down Richardson’s son, Wade Cudmore, who was believed by associates to have killed two brothers and stolen cash and drugs.

When they discovered Cudmore was absent, the pair attempted to extract information from Richardson. Evidence showed she resisted, sustaining non-fatal injuries to her hands and arms, before the two men worked together to kill her and fled the scene. Her body was later discovered in her basement by an RCMP officer arriving to caution Cudmore about potential danger.

Related Legal Outcomes

The fatal event was tied to a broader sequence of violent incidents. Cudmore was taken into custody the day after his mother’s body was found and was subsequently convicted of two counts of second-degree murder involving the deaths of brothers Erick and Carlos Fryer.

Meanwhile, Falk entered a guilty plea to second-degree murder for Richardson’s death and received a life sentence in February with no chance of parole for 16 years.

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BC STORIES

Loss of Newborn Calf Puts Fresh Focus on Endangered Southern Resident Whales

A critically endangered southern resident killer whale, J31, was seen pushing a dead newborn calf in B.C. waters, raising concerns for the population.

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Tragic Sight Recorded Off Sombrio Point

Researchers with the Center for Whale Research confirmed that a female southern resident killer whale was seen pushing a dead newborn calf on her nose on Oct. 3 in the Strait of Juan de Fuca near Sombrio Point.

Mark Malleson, a researcher with the Washington-based organization, spotted the 31-year-old orca—identified as J31 or Tsuchi—travelling alongside her immediate family. According to a statement from the group, “It s unclear whether the newborn was a male or female, if it had been carried to full term prior to birth, and if it died after birth or was a stillbirth.”

Reproductive History and Population Pressures

Born in 1995, Tsuchi has a history of reproductive loss, including failed pregnancies and a deceased calf she carried in 2016. Her only surviving offspring is J56, a female named Tofino who was born in 2019.

The loss underscores the deep reproductive challenges confronting the critically endangered population. The Center for Whale Research emphasized that access to large, nutritionally rich Chinook salmon remains one of the primary factors limiting their ability to recover.

“For a population as small as the southern residents, the successful birth and survival of every calf matters,” the organization stated.

Pattern of Loss Across Pods

Tsuchi’s loss recalls similar events documented in the southern resident population, which comprises J, K and L pods. In 2018, J35 (Tahlequah) gained international attention after carrying her dead calf over 1,600 kilometres during a 17-day journey. Tahlequah was seen carrying another dead calf on her head or snout in early 2025. Later that year, 26-year-old J36 (Alki) lost a female calf—marking her fifth documented pregnancy, with only one calf surviving past infancy for under two years.

Recent census data from the Center for Whale Research recorded 74 southern residents, up by one from 73 in 2024. Although two births—K47 in December of last year and L130 in June—raised the total to 76, another calf, L129, is presumed dead after going missing from L-pod in June following observations of poor physical condition.

“The southern resident killer whales remain critically endangered, and their recovery depends not simply on increasing the number of pregnancies, but on creating the conditions in which mothers and calves can survive and thrive,” said the Center for Whale Research.

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BC STORIES

Defense Seeks 12 to 14 Years as Judge Weighs Sentence in Naramata Manslaughter Case

Defense lawyers recommend 12 to 14 years for Ekene Anigbo following his manslaughter conviction in the 2021 death of Kathleen Richardson in Naramata.

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Competing Sentence Recommendations Presented in B.C. Supreme Court

Defense lawyers representing former gang member Ekene Anigbo have asked a court for a prison sentence ranging from 12 to 14 years, arguing that the 27-year-old is making progress toward rehabilitation. Anigbo appeared in B.C. Supreme Court in Kelowna on Oct. 8 for the second day of his sentencing hearing following his Aug. 14 conviction for manslaughter in the death of 57-year-old Kathleen Richardson.

The defense’s proposal stands in contrast to the position of the Crown, which asked on Oct. 7 for a life sentence with no chance of parole for 10 years. Anigbo’s legal team criticized the prosecution’s request, contending that it was an attempt to “artificially inflate” the penalty. If the judge accepts the defense recommendation, Anigbo would become eligible to apply for parole after completing one-third of his term.

Details Surrounding the 2021 Naramata Homicide

The conviction stems from an incident in the early hours of June 9, 2021, when Anigbo and co-accused Jalen Falk entered Richardson’s home in Naramata searching for her son, Wade Cudmore. While Justice Alison Beames ruled that the prosecution did not prove beyond a reasonable doubt that Anigbo fired the fatal shots, the court determined the two men worked together and killed Richardson, whose body was discovered in her basement later that day.

Court proceedings revealed that the intrusion was linked to a broader conspiracy rooted in the killing of brothers Erick and Carlos Fryer. Anigbo’s associates suspected Cudmore was involved in the brothers’ deaths and had taken drugs and money. Armed with at least two firearms, Anigbo and Falk sought information on Cudmore’s whereabouts from Richardson. Evidence showed Richardson resisted, sustaining non-fatal injuries to her hands and arms before being killed.

Subsequent Legal Outcomes and Upcoming Ruling

An RCMP officer found Richardson’s body while visiting the residence to alert Cudmore that his safety might be at risk. Cudmore was taken into custody the following day for the deaths of the Fryer brothers and was subsequently convicted on two counts of second-degree murder. In February, Falk admitted guilt to second-degree murder in connection with Richardson’s death, receiving a life sentence with parole eligibility set at 16 years.

During his time held at the Okanagan Correctional Centre, Anigbo has taken courses in employability skills, anger management, and Indigenous programs, with court hearing he has maintained no gang ties since 2024. Justice Beames is scheduled to deliver the court’s sentencing decision on Nov. 2.

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