Canada is teetering on the brink of a recession and the first step might be a long one:
The latest economic data from Canada shows that it is inching toward recession, after its economy posted its fifth straight month of contraction.
Statistics Canada revealed on July 31 that the Canadian economy shrank by 0.2% on an annualized basis in May, perhaps pushing the country over the edge into recessionary territory for the first half of 2015.
“There is no sugar-coating this one,” Douglas Porter, BMO chief economist, wrote in a client note. “It’s a sour result.”
There are a lot of reasons being given for Canada’s economic problems including a housing “bubble” in Toronto and Vancouver and associated overbuilding but I think that the linked article has things almost exactly the wrong way around. As it turns out Canada wasn’t immune after all to the recession that started in the U. S. in 2007-2008 and spread around the world. It’s only oil prices that have kept Canada’s economy afloat and now that oil prices have fallen and look as though they’ll remain low for some time, there’s nothing preventing the Canadian economy from falling.