David Rosenberg, President and Chief Economist & Strategist of Rosenberg Research & Associates Inc., talks with Financial Post’s Larysa Harapyn about how Canada will get a recession ‘earlier and harder’….(read more)
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Title: Canada’s Economy Bracing for an Earlier and Harder Recession
Introduction:
As the world grapples with the economic fallout of the ongoing COVID-19 pandemic, Canada finds itself at a critical juncture in its path towards recovery. To the nation’s dismay, experts are warning that Canada’s economy might face a recession that could hit earlier and harder than expected. This article examines the factors contributing to this grim prediction and the challenges that lie ahead for the Canadian economy.
1. Global Economic Uncertainty:
The interconnectedness of the global economy means that Canada cannot escape the repercussions of worldwide economic instability. The pandemic-induced lockdowns and travel restrictions have severely impacted international trade, causing a slump in demand for Canadian goods and services. As global markets continue to face uncertainty, the ripple effects on Canada’s export-dependent industries will inevitably lead the nation towards a recession.
2. Hindered Recovery Efforts:
Canada’s initial economic bounce-back was driven by government initiatives, including extensive financial relief programs and fiscal stimulus packages. While these measures helped to mitigate the immediate impacts of the pandemic, they also put a significant strain on the federal budget. As the country’s debt burden rises, it limits the government’s ability to provide additional support during a prolonged recessionary period.
3. Housing Market Vulnerability:
The Canadian housing market has been a primary driver of economic growth in recent years, but it also poses a significant risk in the event of an economic downturn. Despite efforts by regulators to cool an overheated housing market, uncertainties in employment and income stability could lead to increased mortgage defaults and a decline in housing prices. This, in turn, could trigger a negative wealth effect, further dampening consumer spending and prolonging the recession.
4. High Household Debt Levels:
Canada has one of the highest household debt-to-income ratios in the developed world. Years of low-interest rates have incentivized consumers to accumulate debt, making them more vulnerable when faced with economic downturns. As job losses rise and incomes shrink, Canadians may find it increasingly challenging to service their debts, creating a drag on the economy and exacerbating the recessionary pressures.
5. Structural Weaknesses:
The pandemic has exposed key structural weaknesses in the Canadian economy. The heavy reliance on a few key industries, such as oil and gas, has intensified the blow to Canada’s economic landscape. The slump in oil prices, compounded by weakened global demand, has resulted in job losses and reduced investment. Diversifying and developing new sectors to create resilience is crucial for a robust and sustainable recovery.
Conclusion:
Canada’s economy, like many others around the world, faces an uphill battle towards recovery, compounded by specific vulnerabilities. If the predicted earlier and harder recession manifests, policymakers will need to adopt strategic measures to protect vulnerable industries, support struggling households, and address structural weaknesses. A cohesive national effort to navigate these challenges while seeking new avenues for growth will be vital in ensuring Canada’s long-term economic prosperity.
Next is depression. Or maybe we are in depression people stealing from stores. Like people did in durty thirties.
Capitalism is collapsing. The worlds workers had their eyes opened to the corruption being carried out by the world's wealthy. It's only going to get worse for those vultures trying to pick whatever meat off the carcass of the working poor they can. WE see you, we see your influence now. Time for the power of the worker to make a serious comeback and pull the reigns out of the hands of those in their palatial mansions and yachts.
Inflation is theft. Increasing that theft by another 50% is disgusting. The only ones who benefit from it are those capable of owning assets and getting low interest billion dollar loans. This man speaks as if he is highly leveraged and needs liquidity to be added to the market to save him from defaulting. You wonder why people in the lower income bracket speculate on crypto…
It is the plan though isn't it? Remove the middle class, make everyone broke so the WEF controlled psycho's can swoop in to "save" you. All at the low, low cost of the surrendering of every freedom you had.
What are these guys talking about, every year since the start of the pandemic has felt like a recession, with the Ukraine/Russian conflict and impact to global supply chains pushing that recession even deeper, people are dealing with unaffordable housing and record inflation, so nothing new here.
is a recession started by and for the azzhole politicians in this country to keep us in the poor house. is time for a rebellion. round up all the politicians – charge them all with treason and bring back the death penalty for treason. include the bankers in that as well. " we were just following orders " didnt work for the nazis. wont work for them either.
Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market.
FP for Fear Porn . Disgusting
MY GOD! Way slow on the draw Financial Times!
Did you know that the sky is blue and cows go moo?! WHO"D THUNK IT!?
Meanwhile construction is still just flat out busy busy! 140 hours on a bi weekly pay cheque consistently. Desperate for good workers and good help. 30+ dollars an hour starting positions arent even uncommon anymore in Alberta. Come to work right now with no experience and pull $80,000 a year and you only go up from there.
“These aren’t normal wage increases being asked for.” You mean people asking for their pay to keep up with inflation? Don’t blame the worker, blame the economy.
Justn look at housing compared with rest of world. Major collapse in this decade.
A financial system that actually aims for any amount of inflation just feels wrong.
PM Justin does not care of economy or the country. Jagmeet Singh NDP is with him to ruin the country. Canada needs business and market.
Why has mass media and our government been warning of recession since the pandemic roughly ended over a year ago? And yet they have been wrong all this time.
This clown says your inflation ahould be 3% yearly!! Another rich white guy talking stupidity..
I'm glad to get into crypto currency when I did was a game changer for me financially it's was my best decision so far. Thanks to expert MRS Trisha because she made everything possible.
This is right-wing propaganda.
Let's talk about the fact that right wing propagandistw, like Larissa and David, have been trying to talk this country into a recession for 5 years now.
Conservatives need this country to fail so they can succeed, and if they can talk us into it they will. Hi
Just call it what it truly is a massive depression…sugarcoating does not help
The way I see this recession most likely has an external cause. The United States is losing influence as a federal currency for the first time in decades. They don’t have any economies to utilize or control their inflation, and less money is being spent on stock and oil trading than previously. They all lend credence to the hypothesis that a new multilateral world order may be in the works.
Why is Boris Becker giving economic advice?
Just find werr trudeau deturned our money to and take it back then recession is over
Banks kept saying recession recession and when it wasnt happening they bumped up interest rates and now its happening
We are in a recession , probably for the past two years.
Trudeau should Resign and get lost, Elections should come and only then nation will be on track.
Recessions are a normal part of the economic cycle, therefore your only option is to be prepared and make plans accordingly. 2009 saw a recession when I started my profession. My initial job out of college was performing aerial acrobatics on cruise ships. I have built my own company, work as a vice president for a significant organization, own three rental properties, make investments in stocks and companies, and have experienced a two million dollar increase in my net worth in the last four years.
YouTube must think I’m dumb, because clearly this is where all the suckers come to get hosed.
So… capitalists don't want to pay wages and the government doesn't want to bail them out in order to keep their already record profits high. A recession is coming unless workers accept lower wages, longer hours, unaffordable housing, and fewer benefits? Is that the litmus test?
Liberals spent sooo much money for what ? Literally half our taxes go to the federal government. What do they do with it ?
Its American finance and not Canadian leads of gov and industry. Time for real movement, not a mosaic marketing gimmick. This is attrition fixing these leaders greed and ignorance.
There is NO HOPE as long as Turdeau and the liberals are in power.
My mental health is suffering
A recession will be very helpful in lowering inflation, it's why the gov't is trying so darn hard to bring one about.
The Sky is Falling.. The Sky is Falling.. A self fulfilling prophecy promoted by Inept 'reportage' and formulated by chicken little types.. with their noses pressed flat to the candy store windows.
Good, hope country sinks into sink hole with Tredeau. All Canadians are Nazi's