A viral video caught fire on X recently. A Venezuelan immigrant living in Canada warned that everything happening here now is what happened in Venezuela 20 years ago. Step by step. We are not going to tell you Canada is Venezuela. It is not. But the similarities between the current Canada economy and pre-collapse Venezuela are uncomfortable enough that they deserve a serious look.
We are not talking about hyperinflation or currency collapse. We are talking about the early warning signs that showed up in Venezuela years before things got bad. The patterns that people ignored until it was too late to do anything about them. Some of those same patterns are showing up in Canada right now. Not at the same scale. Not with the same speed. But on the same trajectory.
Inflation: The First Similarity Between Canada’s Economy and Pre-Collapse Venezuela
Canada hit 8.1% inflation in June 2022. Highest in decades. The Bank of Canada raised rates aggressively and got the headline number back down to around 2.4% by 2024. Politicians said it was fixed.
Except prices never came back down. Groceries, rent, gas. Canadians are still paying 15% or more above where things were in 2019. Wages have not kept up. The CPI number looks better but the squeeze on people’s actual lives has not gone away. If you buy groceries in this country you already know this.
Venezuela’s inflation started the same way except it never stopped. In 2014 they hit 69%. By 2015 it was 181%. A year later it was 800% and climbing. The bolívar became wallpaper. People started using dollars, gold, and barter because the currency was worthless.
Nobody is saying Canada’s inflation is heading to 800%. But a government spending its way into an inflation problem and then declaring it fixed while people’s purchasing power keeps eroding. That part is familiar. That is one of the similarities between the current Canada economy and pre-collapse Venezuela that people need to pay attention to. The scale is different. The direction is the same.
Canada’s Debt Trajectory Mirrors Pre-Collapse Venezuela
Canada’s federal debt is sitting around 105 to 107% of GDP. A decade ago it was around 70%. COVID spending pushed it up and the spending never came back down. In 2024 government expenses jumped over 10%, adding another $42.9 billion deficit on top of everything else. GDP contracted 0.6% in Q4 of 2025. Unemployment hit 6.7% in February 2026. The economy is weakening and the debt keeps growing.
That trajectory limits what the government can do when the next crisis hits. If rates stay elevated the cost of servicing the debt becomes a major budget item. If rates come down it is probably because the economy is in trouble which means revenue drops and deficits get worse. There is no good version of this.
Venezuela’s debt hit 85% of GDP by 2014. They were subsidizing gasoline so heavily it was eating over 10% of their economy. When oil prices crashed they had no backup plan. So they printed money. That was the beginning of the end for the bolívar.
Canada is not a petrostate. We have a diversified economy and stronger institutions. But deficits that do not get fixed, spending that outpaces growth, and rising debt servicing costs create the same kind of vulnerability regardless of the country. The details are different. The math works the same way.
We wrote about how interest rates and economic stress tie into precious metals in a separate post. Worth reading alongside this.
Eroding Trust Is Where It Gets Serious
As of late 2024, only about 48% of Canadians trust the Bank of Canada to control inflation. That is according to the bank’s own survey. Basically a coin flip. Half the country does not trust the institution responsible for protecting the value of their money.
That should concern people more than it does.
Trust in a central bank is not something that erodes and then magically comes back. Once enough people stop believing the institution can do its job they start acting accordingly. They move money into other currencies. They buy hard assets. They pull forward purchases because they expect prices to keep rising. All of that accelerates the very problem the central bank is supposed to be solving.
This is where the similarities between the current Canada economy and pre-collapse Venezuela are the most uncomfortable. By 2014 Venezuela’s central bank had lost any pretense of independence. The government was telling it to print money to cover deficits. Money supply jumped 64% in a single year. Inflation exploded. And instead of addressing it the government hid the real numbers and went after websites that published accurate data.
Canada is nowhere near that level of institutional failure. But the erosion is the warning sign. Not the collapse. By the time trust is fully gone it is too late to do anything about it.
The Currency Question
The Canadian dollar still floats freely on global markets. That is a genuine sign of stability compared to what Venezuela did. Starting in 2003 Venezuela imposed strict currency controls, fixed exchange rates, and restricted access to US dollars. That created a massive black market where the real value of the bolívar was a fraction of the official rate. Multiple devaluations and removing zeros from the currency did nothing.
The loonie is not there. It weakened against the US dollar through 2022 to 2024 but it is functioning. The damage has not been a currency collapse in the traditional sense. It has been inflation quietly eating away at what your dollars can buy. You still have dollars. They just do less than they used to. And every year that continues the gap widens.
This is the part of the comparison where people say the two countries are totally different and use that to dismiss the whole thing. The currencies are different, yes. But purchasing power erosion is purchasing power erosion whether it happens fast or slow. Venezuela’s happened fast. Canada’s is happening slowly. The people losing buying power every year are losing it either way.
What Gold Does When Trust Breaks Down
When Venezuela fell apart, gold was one of the few things people could rely on. It held value when the currency did not. It did not depend on a government keeping its promises. People who had gold got through the crisis. People who had bolívars did not.
When you look at the similarities between the current Canada economy and pre-collapse Venezuela, the case for gold gets clearer. Gold is not a bet against Canada. It is insurance against a scenario where the things you are relying on, your currency, your government’s fiscal discipline, your central bank’s credibility, do not hold up the way you expect them to.
We wrote about why we think gold is a buy right now with specific data on the current macro environment. The Iran war, oil, consumer sentiment at an all-time low, ISM data, all of it. That article covers the short-term case. This article is about the longer-term backdrop underneath it.
Gold cannot be printed. It cannot be inflated away. It does not care what the Bank of Canada’s policy rate is or what the government’s deficit looks like. It has survived every currency crisis in history because it is not a currency. It is the thing people move into when currencies fail. We believe there is a place for it in every Canadian’s portfolio and we have believed that for years. The trajectory we are seeing does not change that view. It reinforces it.
If you are wondering how much to hold, we wrote about that in how much gold and silver you should own. If you want to understand the commodity cycle thesis that underpins our view, that post covers the historical data. And if you are thinking about silver alongside gold, our post on whether silver is a good investment in Canada applies the same macro lens to the silver market.
We are not saying Canada is Venezuela. We are saying the similarities between the current Canada economy and pre-collapse Venezuela are real. They are there in the debt numbers, the inflation trajectory, the trust erosion, and the purchasing power decline. They are uncomfortable precisely because Canada is a developed country with strong institutions and it is still showing these patterns. If you think those patterns reverse on their own without anyone making hard choices, you are more optimistic than we are.
Browse our gold coins and gold bars. Check the live gold price in CAD. And if you want to talk about what makes sense for your situation, we are in Toronto.
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