Â鶹´«Ã½

Business

    • Canada recession: It's coming, RBC predicts, but how long will the downturn last?

    Share

    Canada is headed towards a moderate recession, but the economic contraction is expected to be short-lived compared to previous recessions, economists with Royal Bank of Canada predict.

    The Bank of Canada has been hiking its key overnight interest rate aggressively this year to combat skyrocketing inflation, which surged to 7.7 per cent in May, the fastest rise in nearly four decades and well above economists’ expectations.

    With the central bank maintaining its two per cent target, more aggressive moves are expected this month and beyond to bring inflation down by 5.7 per cent. Economists are predicting a 75 basis point hike in July – mirroring the U.S. Federal Reserve’s move in June – and another 50 in September, a .

    The forceful strategy, in step with the U.S. Fed, has raised concerns that Canada is headed for a recession, with high borrowing costs leaving Canadian households carrying too much debt particularly vulnerable. Experts say lower income groups have the greatest exposure to the dual risks of inflation and rising interest rates.

    According to economists, much of the inflationary pressures are coming from outside Canada, with energy and food prices soaring on the back of supply chain bottlenecks due in part to Russia’s invasion of Ukraine.

    “Canada’s economic growth has fired on all cylinders following pandemic shutdowns,†said economists Nathan Janzen and Claire Fan in an .

    “But a historic labour squeeze, soaring food and energy prices and rising interest rates are now closing in. Those pressures will likely push the economy into a moderate contraction in 2023…Still, by historical standards, we expect the slowdown to be modest.â€

    Janzen and Fan said strong activity within the travel and hospitality sectors and higher commodity prices are helping to fuel a recovery, but a lack of workers is hampering businesses trying to expand. They note that while there were 70 per cent more job openings last month compared to the same time period prior to the pandemic, employers were competing for nearly nine per cent fewer workers in the job market.

    “Soaring prices are cutting into Canadians’ purchasing power at the pump and the grocery store,†they said.

    “As the economic contraction plays out next year, [the unemployment] rate will likely rise another one and a half percentage points to 6.6 per cent. These job losses will come at a time when Canadians are already grappling with higher prices and debt servicing costs, factors that have hit lower income households the hardest.â€

    Meanwhile, a report released on Tuesday by the Canadian Centre for Policy Alternatives (CCPA) found that over the last 60 years, the three times the Bank of Canada managed to reduce inflation by 5.7 per cent through a rapid and aggressive rise in interest rates, a recession followed. But economists at RBC and elsewhere have said there are few alternatives central banks can use to deal with inflation.

    “The Bank of Canada now has little choice but to act,†Jazen and Fan wrote.

    “Inflation has been too strong for too long and is starting to creep into longer-run business and consumer expectations. Higher inflation expectations can become self-fulfilling, making businesses more likely to pass on cost increases and consumers more willing to pay for them.â€

    Even without the interest rate moves, slowing growth and demand outside the country will weigh on Canada.

    Despite these concerns, RBC believes the recession will be less severe than previous economic downturns.

    “Global inflation pressures may soon peak,†the economists predict.

    “Prices are still rising too fast and inflation won’t slow sustainably until demand falls. But once that happens, central banks will ease interest rates again…We don’t think it’ll take long to unwind that weakness in 2024 and beyond.â€

    Graphic by CTVNews.ca Data Journalist Deena Zaidi

    CTVNews.ca Top Stories

    Two nephews of the beloved Harry R. Hamilton share stories about his life and legacy.

    The union representing some 1,200 dockworkers at the Port of Montreal has overwhelmingly rejected a deal with their employers association.

    Canada

    • Two nephews of the beloved Harry R. Hamilton share stories about his life and legacy.

    • The union representing some 1,200 dockworkers at the Port of Montreal has overwhelmingly rejected a deal with their employers association.

    • A man who was critically injured in a police-involved shooting in Hamilton late Sunday afternoon has died in hospital, says the province’s police watchdog.

    World

    Politics

    • Murray Sinclair’s family members say the late justice and senator has been laid to rest according to his wishes.

    • Prime Minister Justin Trudeau announced voters in Cloverdale—Langley City will pick their next member of Parliament on Dec. 16.

    Health

    Sci-Tech

    Entertainment

    Business

    Lifestyle

    Sports

    Autos

    Local Spotlight

    For the second year in a row, the ‘Gift-a-Family’ campaign is hoping to make the holidays happier for children and families in need throughout Barrie.

    Some of the most prolific photographers behind CTV Skywatch Pics of the Day use the medium for fun, therapy, and connection.

    A young family from Codroy Valley, N.L., is happy to be on land and resting with their newborn daughter, Miley, after an overwhelming, yet exciting experience at sea.

    As Connor Nijsse prepared to remove some old drywall during his garage renovation, he feared the worst.

    A group of women in Chester, N.S., has been busy on the weekends making quilts – not for themselves, but for those in need.

    A Vancouver artist whose streetside singing led to a chance encounter with one of the world's biggest musicians is encouraging aspiring performers to try their hand at busking.

    Ten-thousand hand-knit poppies were taken from the Sanctuary Arts Centre and displayed on the fence surrounding the Dartmouth Cenotaph on Monday.

    A Vancouver man is saying goodbye to his nine-to-five and embarking on a road trip from the Canadian Arctic to Antarctica.

    • Weather watchers were treated to an exceptionally rare display on Friday evening as rare cloud formations filled Vancouver skies.

    • For some shoppers it was Nov. 1, but for others the first hints of Christmas - saccharine treats, festive-fragranced candles and gaudily wrapped gift sets - were being noticed in stores long before the final Halloween decor had been cleared.

    • Thousands of people are expected to gather in downtown Vancouver on Monday to observe the city’s 100th Remembrance Day ceremony.

    • Toronto is expected to see an economic boost to the tune of nearly $300 million thanks to Taylor Swift’s upcoming Eras Tour, which will be making a stop in Canada’s largest city for a six-show run later this month.

    • One man was transported to hospital early Monday morning after a stabbing in the northwest end of the city, Toronto police say.

    • Calgarians will be observing Remembrance Day at a number of different ceremonies across the city, including at the Hangar Flight Museum.

    • A home in the northeast Calgary community of Saddle Ridge was damaged in a fire on Sunday.

    • WEATHER

      WEATHER

      Conditions were warm early Monday and expected to remain that way for most of the day.

    • WATCH LIVE

      WATCH LIVE

      CTVNewsOttawa.ca looks at Remembrance Day ceremonies in Ottawa.

    • After months of controversy surrounding a dog park in Ottawa's west end, a solution has been reached to divide the park in half.

    • With fewer interments and rising maintenance fees, the money for Canada's largest military cemetery will run out in three to four years.

    • The employers association at the Port of Montreal locked out nearly 1,200 longshore workers, bringing a halt to traffic at the port.

    • Though most businesses are expected to be open on Remembrance Day, there are some establishments that will be closed to commemorate the holiday.

    • Monday is Remembrance Day, a time to honour armed forces members who have died in the line of duty.

    • WEATHER

      WEATHER

      This is shaping up to be one of the warmest Remembrance Days in the past decade, at least, for temperatures.

    • Maritimers will stop Monday to remember those who have served, and continue to serve, in Canada's armed forces for Remembrance Day.

    • A Cape Breton senior recalls her life in German-occupied France, and her mother’s death, during the Second World War.

    • Thousand of people gathered at the Menin Gate in the Ypres, Belgium for Monday’s Remembrance Day Ceremony.

    • Remembrance Day is today, and a number of ceremonies are taking place around the province to honour those who gave their lives to serve our country.

    • A pillar in Canada’s history was honoured in Winnipeg Sunday afternoon, with thousands showing up to pay tribute to the life and legacy of the late Murray Sinclair.

    • Winnipeg police have identified two men involved in a stabbing incident earlier this week.

    • There will be two ceremonies taking place in Regina for Remembrance Day, hosted by the Royal Canadian Legion.

    • Regina author Valerie Crowther is celebrating the release of her book ‘War Letters: Linking Lives in the Second World War.’

    • It was a somber day at Mosaic Stadium as members of the Saskatchewan Roughriders officially cleaned out their stalls and closed the book on the 2024 season.

    • A team of tornado experts is heading to Fergus after a storm ripped through the area Sunday night.

    • People across Canada will pause to reflect Monday at Remembrance Day Ceremonies across the country.

    • A man has been charged after a stabbing at an apartment building in Kitchener.

    • Saskatchewan RCMP are searching for a suspect after a man was seriously injured in a farm-related incident in Montreal Lake.

    • It was a somber day at Mosaic Stadium as members of the Saskatchewan Roughriders officially cleaned out their stalls and closed the book on the 2024 season.

    • The Regina Rams claimed the Hardy Cup after a hard fought battle against the Saskatoon Huskies 19-14 on Saturday in the first all Saskatchewan U-Sports western conference final since 2002.

    • WATCH LIVE

      WATCH LIVE

      The events will start at 10:15 a.m. with a parade that forms up in front of the Delta London Armories, marches east on Dundas Street and turns north onto Waterloo Street to Dufferin Avenue, the west to the Cenotaph.

    • Emergency crews responded to the scene on Road 68/Highway 2 east of Thamesford around 7 p.m.

    • On Friday, the Sarnia Police Service (SPS) received a report of an alleged abduction in the area of Kathleen Avenue and Walnut Avenue.

    • Watch Live

      Watch Live

      Barrie residents will gather on Monday to honour Canada’s veterans and pay tribute to those who served and sacrificed for the country.

    • A driver is facing multiple charges after a multi-vehicle collision on Highway 400 early Sunday morning.

    • A heavy police presence has been seen in an Innisfil neighbourhood throughout the day.

    • 11 AM:WATCH LIVE

      11 AM:WATCH LIVE

      Representatives of the Windsor Veterans Memorial Services Committee, military representatives, wreath bearers, government officials, and members of the public will attend the Cenotaph at City Hall Square for the outdoor service.

    • One person has been arrested after Chatham-Kent Police Service (CKPS) received multiple complaints about an alleged drunk driver.

    • More details have been released about a police investigation at the Ambassador Bridge that connects Windsor, Ont. and Detroit, MI.

    • Environment Canada says heavy rain and winds could cause power outages on Vancouver Island as an "intense" storm system is set to hit the B.C. coast Sunday.

    • Six deer were struck by vehicles in six different locations in a six-hour period on B.C. highways on Saturday, according to the transportation ministry.

    • The union for locked-out port workers in British Columbia says the BC Maritime Employers Association cut off talks in less than an hour Saturday, refusing to budge on a final offer that the union has so far rejected.

    • The emergency department at South Okanagan General Hospital in Oliver, B.C., will be closed for 31 hours this weekend, the second such closure in a week and the third since the start of November.

    • Police in Kamloops, B.C., are reminding parents and guardians to check their children's Halloween candy after receiving a report of a mother finding a razor blade in one of her daughter's treats.

    • More than two years after Alannah Brown and Douglas Barker were found dead north of Penticton, police are asking for help identifying a vehicle they believe was associated with the crime.

    • The Southern Alberta Recreation Association is officially announcing the Town of Taber as next year’s host for the Southern Alberta Summer Games.

    • The Lethbridge Hurricanes broke open a close game with three goals in the first two minutes of the third period as they defeated the Warriors 7-3 in a game played Friday night in Moose Jaw.

    • There might not a lot snow just yet, but many southern Albertans are still itching to get outdoors.

    • It was just days before the COVID-19 pandemic shut the world down when the Shaft Bottom Boys of Sudbury broke a world record for 'Deepest Concert Underground.' Now, more than four years later, a Timmins band is looking to take the title.

    • Police have arrested a 15-year-old in connection with a break-in and $50,000 in damage done to the Centennial Arena in Elliot Lake in September.

    • Mayors of the five largest cities in northern Ontario met in North Bay the last two days to discuss a range of critical issues impacting their cities and the region.

    N.L.

    Shopping Trends

    The Shopping Trends team is independent of the journalists at Â鶹´«Ã½. We may earn a commission when you use our links to shop. Read about us.

    Stay Connected
    Follow Â鶹´«Ã½