"W ho's ready for a recession? Almost no one, of course. Certainly not the millions of Canadians- more than half the country -living paycheque to paycheque. Nor those, likely many of the same people, who've collectively sunk $2.5 trillion into consumer debt, $122 billion of which is owed to credit card companies. Canada has weathered recessions before, but the forecast today looks severe, darkened by problems like record-high youth unemployment."
"Last month, of the economic outlook, the bank's governor, Tiff Macklem, said, "It's not going to feel good. It is growth, but it's slow growth." This, however, is the same institution that downplayed inflation fears back in 2021, just before the consumer price index rate surged. On September 17, the bank cut the prime interest rate to 2.5 percent, noting that while it didn't expect a recession, the economy is weaker."
More than half of Canadians live paycheck to paycheck, while household consumer debt totals about $2.5 trillion, including $122 billion in credit card debt. Record-high youth unemployment and other vulnerabilities deepen recession risk. Statistics Canada reported the economy shrank at an annualized 1.6 percent in the quarter ending June 30, following a prior GDP drop in third quarter 2023. The Bank of Canada lowered its prime rate to 2.5 percent and describes future growth as slow, while some forecasters and Deloitte predict avoiding a technical recession through 2025. The divergence between data and cautious optimism leaves economic prospects uncertain.
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