{"id":308306,"date":"2025-11-26T14:55:08","date_gmt":"2025-11-26T14:55:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/308306\/"},"modified":"2025-11-26T14:55:08","modified_gmt":"2025-11-26T14:55:08","slug":"is-canada-in-a-recession-some-answers-are-coming-this-friday","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/308306\/","title":{"rendered":"Is Canada in a recession? Some answers are coming this Friday"},"content":{"rendered":"

Canadians will gain a better understanding of the country\u2019s financial health later this week with the scheduled release<\/a> of economic data from Statistics Canada.<\/p>\n

Several key gross domestic product (GDP) reports are expected to be released on Friday, Nov. 28, including figures for September and the third quarter of 2025.<\/p>\n

The Bank of Canada<\/a> and some of the country\u2019s top financial institutions<\/a> are projecting moderate GDP growth of 0.5 per cent, but some economists believe that forecast is wishful thinking and say figures could be slightly lower.<\/p>\n

The central bank currently defines a recession as two consecutive quarters of negative economic growth, measured by GDP.\u00a0<\/p>\n

In August, the country\u00a0reported a -1.6 per cent GDP decline<\/a>\u00a0during the second quarter of 2025, which followed a strong 2 per cent gain in the previous quarter. Economists attribute the decline to international trade disruptions, which have plummeted Canadian exports.<\/p>\n

If Canada\u2019s GDP growth is negative for a second quarter in a row, it could indicate that the country is experiencing a recession.<\/p>\n

\u201cIt\u2019s been a long time since we saw a protracted contraction of the economy, but it has happened before,\u201d economist Armine Yalnizyan told CityNews.<\/p>\n

The last time the Canadian economy experienced two consecutive quarters of negative GDP growth was in 2020 during then COVID-19 pandemic which marked a period of business closures and travel restrictions, along with decreases in household spending, investment and international trade.<\/p>\n

According to economist Angelo Melino, the central bank\u2019s two-quarter guideline is a general rule of thumb used to qualify a recession, but it always a definitive measurement.<\/p>\n

\u201cWe rely more on the GDP numbers in Canada than they do in the United States,\u201d he explained. \u201cBut it depends on how long that decline lasts and how widespread it is before we can determine if we\u2019re in a recession.\u201d<\/p>\n

In addition to teaching economics at the University of Toronto, Melino is also a research fellow at C.D. Howe Institute\u2019s Business Cycle Council.<\/p>\n

C.D. Howe Institute is a right-leaning think tank with a stated mission to \u201craise Canadians\u2019 living standards by fostering economically sound public policies,\u201d according to its website. Meanwhile, its Business Cycle Council proposes the start and end dates of recessions in Canada.<\/p>\n

\u201cAt C.D. Howe, we look at the average growth rate over two quarters, before we start thinking about whether or not we\u2019re in a recession,\u201d Melino said.<\/p>\n

\u201cIn 2025, it looks like we had stronger growth in quarter one than we had in quarter two, so the average over the first two quarters of the year is positive,\u201d he explained. \u201cEven if quarter three turns out to be negative, unless it\u2019s a steep decline that drops the average of quarter three and quarter four, we won\u2019t declare that a recession.\u201d<\/p>\n

What to expect from Q3?<\/p>\n

Canada\u2019s GDP grew by 0.2 per cent in July following three consecutive months of declines. It fell again in August by 0.3 per cent, offsetting gains made the month before. Melino attributes the negative outcome to the Air Canada labour strike which saw more than 10,000 flight attendants walk off the job during the summer.<\/p>\n

When Statistics Canada releases GDP data for the month of September later this week, Melino expects to see slightly better figures than the previous month due in part to the end of the strike.<\/p>\n

\u201cI think people expect September to be a little bit better because of those 10,000 people going back to work,\u201d he explained. \u201cThink of all those livelihoods and all the people that were affected.\u201d<\/p>\n

Canada\u2019s economy has taken a major hit over the last year, mostly as a result of U.S. President Donald Trump\u2019s tariffs on major Canadian exports like autos, steel, aluminum and lumber.<\/p>\n

\u201cThe bottom line is the economy is basically going sideways,\u201d economist Don Drummond explained. \u201cAnd it\u2019s going sideways because of the hit to our exports, which are around one quarter of our economy.\u201d<\/p>\n

\u201cAnd that, in turn, is causing investment to be even weaker than it was before,\u201d he added. \u201cIf the government actually started to build all the housing starts they claim they\u2019re wanting to build, that could turn things around, but all the governments, federally and provincially, seem to be behind their targets, so I\u2019m not sure if that\u2019s going to do it.\u201d<\/p>\n

\u201cI don\u2019t think consumption is going to take off and be strong, either,\u201d Drummond said. \u201cWe\u2019ve still got a lot of households that are renewing their mortgages from these super low rates they had in 2020 to 2022, and so far they\u2019re doing that without defaulting on their mortgages, but I\u2019m sure it\u2019s squeezing them on their discretionary spending.\u201d<\/p>\n

Drummond previously held senior positions in the federal Department of Finance and was Chief Economist at TD Bank from 2000 to 2010. He is also an adjunct professor at Queen\u2019s University.<\/p>\n

\u201cI think we\u2019re in for some rough economic times, whether it\u2019s a traditional recession or it\u2019s a bunch of quarters of very, very weak growth or flat growth,\u201d he added.<\/p>\n

While the forthcoming Statistics Canada\u00a0data is expected to provide some insight into Canada\u2019s economic outlook, it will be missing international trade data which the agency receives from the U.S. Census Bureau for information on Canadian exports to the U.S.<\/p>\n

That data has been delayed <\/a>as a result of the six-week U.S. government shutdown, which economists warn could lead to larger-than-normal revisions of GDP data in the future.<\/p>\n","protected":false},"excerpt":{"rendered":"Canadians will gain a better understanding of the country\u2019s financial health later this week with the scheduled release…\n","protected":false},"author":2,"featured_media":295599,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[43,44,41,39,42,40],"class_list":{"0":"post-308306","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-headlines","9":"tag-news","10":"tag-top-news","11":"tag-top-stories","12":"tag-topnews","13":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/308306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=308306"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/308306\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/295599"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=308306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=308306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=308306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}