Canada's recession is over, and the country is beginning what will be a long reconstruction of the wealth destroyed by the financial crisis, the Bank of Canada said Thursday.
Gross domestic product will expand at an annual rate of 1.3 per cent this quarter, compared with an earlier forecast for a contraction of 1 per cent between July and September, the central bank said in its latest monetary policy report.
The dramatic shift is the result of stronger financial conditions, surprisingly high consumer and business confidence and a first-half contraction that was less severe than the economic catastrophe the central bank was bracing for when it last published its views on the economy in April.
If the bank's new forecast proves correct, Canada's first recession since the early 1990s lasted three quarters, making it one of the shortest downturns on record.
This would be a pretty short recession in Canada. Unlike USA and most of Europe, Canada avoided any serious collapse in the financial sector. The resource sector also has held up relatively well (even though foreign resource demand collapsed, the fact that the Canadian dollar also fell sharply probably mitigated the damage.) However, Central Canada, which is where I am, suffered terribly and will continue to do so for a while. Ontario and Quebec, two major central provinces, depend on manufacturing. Ontario, in particular, saw its auto sector decimated and its manufacturing sector collapse (this has been going on for the last 5 years but it hit a peak late last year.) Tags: Canada