In an unexpected statement on January 2, 2017 in front of Global TV’s nightly news cast, “Global National”, professor Ian Lee, MBA director, Sprott School of Business of Ottawa’s Carleton University, simply said: “I could see us [Canada] being in a recession in 2017-2018.” I had to pause for a moment and remind myslef, yet again after last week, that yes, this is, in fact, a mainstream news channel.
The thing about recessions is that you never know you’re in one until you’ve already been in a recession for at least six months. Meaning, the government has to oficially announce two consecutive quarters of negative growth – the definition of a recesion. Canada already had one negative quarter in 2016, with GDP falling by 1.6% in the second quarter, its worst performance since the Great Recession. So, for all we know, we could already be in a recesion, but will only find that out in the second half of this year!
For sure, for many Canadians, it already feels like a recession. People in Ontario have been struggling for months now with high Hydro rates, which, in many areas of the province, have increased by more that 100%! Add to that the new carbon tax, which would increase the price of gas at the pump by 4.3 cents per litre, implemented in the province as of January 1, 2017, and all the negative consequences it will bring – like higer prices of food, clothes, shoes, furniture and everything else that has to be shipped and transported by trucks – which is basically everything that we eat, wear, need and use, – and there isn’t much hope left for the regular people!
In Newfoundland and Labrador, the provincial government is hiking its income tax rates – for the second time in six months! It is the only province increasing income tax for people in all tax brackets, hitting especially hard low-income families and the middle class.
In Alberta, in addition to the stagnation that started about two years ago, and the highest unemployment rate since the 1980s, a new carbon tax comes in effect. It will also affect the price of gas, which will, in turn, lead to an increase in the price of everything else.
Add all that to Canada’s Food Price Report, published by researchers at Dalhousie University in Halifax about a month ago, which found that the average Canadian family will pay about $420 more for food in 2017, and things only start to look even more gloomy. This represents an average increase in food prices of 3% to 5%, with the highest increases forecast for meats, fish and vegetables – up to 6%. The main concerns of the report were changing weather patterns, the falling Canadian dollar, and – you guessed it – the new carbon pricing implemented by the federal Liberal government.
We are all looking to a future of rising inflation, depreciating currency, and a falling standard of living. The middle class is being wiped out. People are strugling to make ends meet. The debt to income levels of Canadians rose – from 165% in the first quarter of 2016, to 168% in the second quarter. But it is possible to have a relatively good quality of life even during tough times. We do need to change our way of thinking, and the way we live, but it is possible. This is my experience, as someone who has actually lived through an economic crash and 1080% hyperinflation, and is also the reason why I wrote “Survivng Tough Times” – to share my story, and the way we lived through the crisis.