“It’s an election about who will protect our economy in a period of ongoing global instability,” Stephen Harper, Prime Minister of Canada, announced on Sunday as he officially kicked off the campaign for the federal elections on October 19. He’d just asked Governor General David Johnston to dissolve Parliament.
“Now is not the time for the kind of risky economic schemes that are doing so much damage elsewhere in the world,” he said. “It is time to stay the course and stick to our plan.”
Stay what course, exactly? Because Canada is likely in the middle of at least a “technical recession.”
At first, there was hope that only the oil patch would be headed that way. Now the oil patch is already there. In the city of Calgary, Alberta, the epicenter of the oil bust, home sales plunged 14% in July year-over-year, according to the Calgary Real Estate Board (CREB). Year-to-date, homes sales are down 25%.
Despite months of assurances that the oil bust and the broader commodities rout won’t spread into the rest of the Canadian economy, they’re now beautifully spreading into it.
The Business Barometer Index of small business confidence dropped in July to 58.2, the worst level since mid-2009, a level that corresponds with a shrinking economy. “One normally sees an index level of between 65 and 70 when the economy is growing at its potential,” the report said.
That’s what Statistics Canada has been confirming for months: on Friday, it reported that GDP in May fell for a 5th month in a row.
“Much worse than the flat print expected by consensus,” is how Matthieu Arseneau, a Senior Ecoomist at National Bank Financial explained the phenomenon:
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