By Jock Finlayson and Ken Peacock
Canada’s largest bank, RBC Financial Group, just published a report predicting that Canada will tip into recession in early 2023.
The case for a near-term recession is not obvious. Canada’s labour market has been drum tight for a year or more. The national unemployment rate has been flirting with record lows, and a recent Statistics Canada survey finds at least one million job vacancies spanning every region of the country.Article content
Equity markets have plunged as investors digest the implications of less favourable macroeconomic conditions. Other high-risk asset classes, like bitcoin and the wildlands of the broader crypto universe, have suffered epic selloffs.Article contenttap here to see other videos from our teamAnother reason to anticipate a Canadian downturn is the sharp rise in interest rates here at home.
Thanks in part to excessive government largesse, Canadian households padded their savings balances by some $300 billion in 2020-21. That helped fuel spending on houses and consumer goods – a trend that’s unlikely to last. As pandemic-related restrictions continue to wind down, consumer spending should shift toward services, further dampening demand for durable goods.
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