The leading expert on economic downturns in Canada has stated that it is premature to label the current slow economy as a recession.
There has been ongoing debate in Parliament about whether Canada is officially in a recession following Statistics Canada’s recent report indicating two consecutive quarters of economic contraction.
The C.D. Howe Institute’s Business Cycle Council is typically regarded as the authority in determining a recession in Canada.
While some economists use the guideline of two quarters of GDP decline to signify a technical recession, the council released a statement cautioning against solely relying on this definition and advised against overinterpreting the recent data.
CBC’s Anis Heydari provides insights into the recent Canadian gross domestic product figures and the unexpected economic downturn, the second consecutive quarterly decline on an annualized basis, which has sparked discussions about a possible technical recession.
Steven Ambler, a member of the Business Cycle Council, explained to CBC News earlier this week that the group assesses three key factors—pronounced, persistent, and pervasive—to determine if the economic decline warrants a recession classification.
The group of experts argues that the current economic weaknesses in Canada do not yet meet the criteria for a recession due to their limited scope and duration. They also noted that the slight dip in the first quarter may be revised in the coming months.
According to the council, the recent GDP decline is not as severe as previous instances where a recession was officially declared by C.D. Howe.
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