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By now everyone is aware that the country is in a recession by the definition that the Tories legislated themselvestwo quarters of negative growth. Some claim there is a silver lining: jobs are up, GDP grew in June, and our exports to our largest trading partner are up. By now the Conservatives are playing politics with their euphemisms "contraction" and "technical recession." They're using these term because they truly believe that the economy has already recovered and that the dip is meaningless.

However, putting the GDP aside and despite the growth in jobs and exports, there are other indicators that suggest we may not be pulling out of the recession at all. From the linked article by economist Iglika Ivanova:

Business investment is down for three consecutive quarters

For starters, business investment is still down and has been on the decline since the Tories won their majority government in 2011. Indeed, Mark Carney, then governor of the Bank of Canada, accused corporate Canada of sitting on stockpiles of dead money. Nothing has change since then and in fact it has only gotten worse.

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Consumers being able to signal demand is the lifeblood of any economy. Companies can't invest if people don't tell them with their dollars what they should invest in. People don't have the money to signal demand if corporate Canada is sitting on it and not investing. It's a catch 22 that requires intervention to get wealth moving again. And that's exactly what happened in January when the Bank of Canada cut interest rates. Except business investment continued to drop for two more quarters with no end in sight.

It's not just oil and gas in decline

Conservatives keep repeating that it's only oil and gas that have turned down. They must only be looking at the oil and gas column in the numbers because the truth is a number of sectors are in decline.

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Construction, manufacturing, and wholesale trade are all major indicators of our economic well being. For some bizarre reason, the Harper Government has completely ignored their precipitous decline and only refers to oil and gas.

Household debt is on the rise

Disposable incomes are falling. The rising consumer spending that people have pointed to as an indicator of our economy recovering is being financed by debt. While the interest rates are dropping, the proportion of debt to household income hasn't budged since 2008.

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Consumers are trying to spend their way out of the recession by incurring more debt, while businesses are sitting on stockpiles of dead money and not investing.

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So growth of 0.5% in June is nice, but our economy is still struggling under Harper's leadership. We need a better focus on a more diversified economy that doesn't give corporate welfare to companies who sit on that money. The problems with Canada's current economy run far deeper than a stagnate GDP.

Edited by cybercoma
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By now everyone is aware that the country is in a recession by the definition that the Tories legislated themselvestwo quarters of negative growth.

This seems a bewildering claim. Harper legislated a recession? Could you explain when that happened?

As far as I'm aware the technical recession is due to a slowdown in China and elsewhere, resulting in a lower demand and lower prices for our commodities. I don't understand how Harper can be blamed for that.

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If you're wondering where that legislation is, it's called the Federal Balanced Budget Act and it was part of the omnibus budget bill passed a few months ago. The exact definition is "a period of at least two consecutive quarters of negative growth in real gross domestic product for Canada." Their legislation allows for deficit spending, but freezes the government's operational spending. Now whether or not the Harper Government will follow its own laws or not is unclear. They have a history of rewriting legislation and firing their own watchdogs to suit their selfish needs.

edited to add link to the act.

Edited by cybercoma
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Harper's Tories legislated the current definition of a recession as "two consecutive quarters of negative growth."

My understanding of the term is that it's a standard economic definition. At least, that is what I have been seeing a number of economists discuss. None said it was defined by the federal government. I am fairly sure the definition is the same in the US, for example.

I simply don't see how Harper can be blamed for us being in a technical recession given the causes are external to Canada.

Edited by Civis Romanus sum
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If this is a resection I will take that any day. I cant get over how some people keep acting like the country is in major trouble. Mind you it would be if harper was not at the helm.

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If this is a resection I will take that any day. I cant get over how some people keep acting like the country is in major trouble. Mind you it would be if harper was not at the helm.

If? This is a recession by the definition of the law that the Tories put into place. There is no "if." In fact, we're not out of a recession until there are two quarters of positive growth by the definition of the same law.

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Perhaps because we have the smallest population in the g7 and we export a lot of things which got us to said g7.

No matter, as smallc says we were in recession and are now out.

How do you know we are out of recession? According to Harper's own legislation, following an official recession, there must be two consecutive quarters of growth to declare the recession over.

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No matter, as smallc says we were in recession and are now out.

According to Conservative legislation we are not out of a recession until we post two consecutive quarters of growth.

And what exactly does the size of our population have to do with economic growth? Is our population shrinking? Because that's really the only way our population would affect the growth rate.

Edited by cybercoma
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How do you know we are out of recession? According to Harper's own legislation, following an official recession, there must be two consecutive quarters of growth to declare the recession over.

Im going with the june numbers, employment levels and the opinions of the economists that say the first half was bad and now we are on an uptick. You guys can nit pick at what harper says.

As for population. The other g7 have a larger population for domestic consumption which feeds their economy. Canada has to export and when a big customer isnt buying, it hurts and takes time to re adjust.

The sky isnt falling

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Im going with the june numbers, employment levels and the opinions of the economists that say the first half was bad and now we are on an uptick. You guys can nit pick at what harper says.

As for population. The other g7 have a larger population for domestic consumption which feeds their economy. Canada has to export and when a big customer isnt buying, it hurts and takes time to re adjust.

The sky isnt falling

June numbers are not a quarter and recessions are defined by quarters.

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Im going with the june numbers, employment levels and the opinions of the economists that say the first half was bad and now we are on an uptick. You guys can nit pick at what harper says.

As for population. The other g7 have a larger population for domestic consumption which feeds their economy. Canada has to export and when a big customer isnt buying, it hurts and takes time to re adjust.

The sky isnt falling

You're dancing around the meaning of a recession and nit picking, by using one month as the reason to try to invalidate the truth.

It's been almost 10 years and Harper has had 7 consecutive deficits. When are you going to accept that your Economic God is a farce?

It should be reminded that when Harper came to power, he actually took a Liberal surplus and turned it into a negative before the world economic meltdown.

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It's due to all the government layoffs Harper, has been cutting every department budget for the last 12 years. I'm willing to live with the recession due to useless people that have no more government jobs can't afford to buy things anymore. We are just going threw a adjustment.

Once all the companies start spending their surplus money and parents have a little extra cash to spend the economy will recover.

Edited by Charles Anthony
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Then why is it only Canada in recession among the G7?

Gee, could it be that resource industries play a much bigger role here than in most G7 countries? Got a lot of mining and oil production in France and Italy, do they?

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Gee, could it be that resource industries play a much bigger role here than in most G7 countries? Got a lot of mining and oil production in France and Italy, do they?

How much of a role do resources play in Norway, who by the bye never went into deficit spending?

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Overall the OP is very good. Sticks to the facts and puts in some opinion we can agree/disagree with.

Not a chicken little post; no indication the sky is falling.

Just that things may not be as sanguine as some would like them to be.

Overall, we are not really going to know much until the election is over.

So, while it is likely safe to say that Canada was in a recession per the definition of a recession used in the legislation, we don't know much else.

For those who want to say that the recession is over - you can't. One month of rebound from forest fires and oil markets does not make for a recovered economy.

We do not have statistics to back that up - yet.

But lets face reality - this will only effect the election to the extent that people feel the economy is weak or improving on election day.

Then the stats will tell the factual story months later.

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It's been almost 10 years and Harper has had 7 consecutive deficits. When are you going to accept that your Economic God is a farce?

It should be reminded that when Harper came to power, he actually took a Liberal surplus and turned it into a negative before the world economic meltdown.

It's been seven years of the financial crisis so quit complaining. The tax cuts you guys keep bringing up were probably one of the reasons we didn't follow most of the world into a deeper recession since they helped stimulate consumer spending.

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Why, I read earlier today that our small population is to blame for the poor GDP numbers, as well as the global oil prices. Here you're telling me Norway with a smaller population and a larger dependency on oil doesn't count as an example because they're not in the G7?

Ok then!

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Why, I read earlier today that our small population is to blame for the poor GDP numbers, as well as the global oil prices. Here you're telling me Norway with a smaller population and a larger dependency on oil doesn't count as an example because they're not in the G7?

Ok then!

I'm not responsible for whatever it is you read. Norway's much smaller population means most of it's oil production is exported, which brings a lot of money into the country. Norway's population is less than one sixth that of Canada's but it actually exports more oil than we do.

Imagine Alberta if it had 100% of Canada's oil exports, and got to keep every dollar, forwarding none to the feds. That's Norway.

Edited by Scotty
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Each party had their leaders put their spin on yesterday's recession numbers. The Liberals and the NDP also had their finance critics talk. (Goodale and Thompson) but where was the Conservative Finance Minister , Joe Oliver? You would think the Finance Minister would have something to say on the matter.

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