Updated: Fri Oct. 31 2008 7:36:53 PM

CTV.ca News Staff

Canada's economy in August continued to follow the zig-zag pattern that has become the norm for much of the last year, with gross domestic product falling 0.3 per cent.

Since December 2007, the economy has tracked along peaks and valleys, with almost month-by-month increases and declines, Statistics Canada reports.

The August drop partly reversed the 0.7 per cent gain that was made in July.

When broken down by industry, the report shows transport industries including the rail and truck transportation sectors saw declines. But accommodation and food services, along with the public sector, saw growth.

The finance, insurance and retail trade sectors saw no change in August.

In the energy and mining sector, output sunk 0.5 per cent after a strong gain of 2.7 per cent in July -- that energy sector strength had been responsible for much of the total economic gains made in Canada's economy that month.

The output of Canada's refineries also dropped, falling 4.5 per cent, partly due to two major production disruptions.

After seeing increases in July, trade in wholesale products fell 3.1 per cent in August, StatsCan reports. The decrease was largely driven by losses in the automotive sector which dragged the wholesale output numbers downward.

Wholesaling of building materials and household goods also saw declines.

Following are some key details from the StatsCan report on August GDP:

• manufacturing saw declines of 1.1 per cent
• construction saw declines of 0.3 per cent
• activity among real-estate agents and brokers declined of 2.9 per cent
• retail trade remains stable
• finance and insurance sector was unchanged
• arts and entertainment dropped 0.7 per cent
• accommodation and food services saw gains of 0.8 per cent

The economic slip shouldn't come as a surprise and is likely the first in a series of stutters as Canada's economy slows pace along with the rest of the world, suggested BMO Capital Markets economist Douglas Porter.

"This result simply unwinds part of July's surprising strength, and would normally be seen as no big deal," Porter told The Canadian Press.

"However, given the marked deterioration in the economic outlook since that time, it unfortunately will look like a loud early warning shot."

Porter also pointed out that the StatsCan numbers are for August -- prior to the global economic slowdown that began in mid-September and has caused governments around the world to take steps to try and protect their economies.

Please Add Comments(30)

Hold the line...
As expected, we are in a 'borderline' recessionary phase. That's OK I can live with that. I feel for those affected with job loss. ...

JP in Ontario
Hmm, well, not entirely surprising given the way things are currently...That being said, the with the definition of a recession being something to the effect of two successive quarters where the economy shrinks, we arent quite there yet...We will just have to wait and see how this unfolds. No panic required yet folks. To any who have lost jobs here, or abroad, I feel for you, and wish you a speedy return to employment, with any luck this will be an opportunity for improvement for you.

JP
Omg
I dont like the comments by this reporter. Keep personal opiniions to yourself and report the facts.
Fact 1 we been on fast moving train out of control the past 3 years people made crazy amount of money
Fact 2 Market is correcting itself for our reckless
Fact 3 Speculators are the root cause of this
and so on !@!!!!!
Reporters report leave personal opinions to yourself and the market will take care of itself
Making a mountain of a moe hill .3 in august. Look at the stats for the last 5 years. Dont be so short sighted!!!!

KJ in Kingston Ontario
Perhaps someone could explain to me how the stock market represents the Canadian econmomy here when core Canadian corporate stocks and mutual funds lose on average over 45% of their value year-over-year to date.

No, it didn't.
C-label of governing party has magic power that wards off all bad news.

Stop causing anxiety.

Live in a delusion.

Chares in Brampton
"Recession right after election!"

Harper chose the perfect time for that last election. He's smarter than I thought. Now he's free to screw us as he pleases.

Shamaro
Wel, before we get started, why don't we all just blame Stephen Harper for this economic slow down.

Let us just get it over with and blame him, Jim Flaherty and whoever other conservatives we can think of along the way.

In all seriousness though, this was expected, no news in this other than we now know the actual numbers.

Personally I believe there is going to be a recession and globally it will be a very long, hard cold recession that is going to take's toll on everybody.

All I can say right now is, stop spending and start saving, because the credit crisis is so bad, that we may not be out of this until at least 2011 or 2012.

Joyce
The ones with job loss are the ones who suffer the most from all this.

Sahib Reginawale
Help me help me we are in a recession. Ah how does it matter to those in nice comfy government jobs.

Tyrell Alexander
Lets not forget that GDP always slows down during the winter after Christmas. Just don't freak out in Jan, Feb, Mar When "lower" numbers come out.

Let's blow all the savings on a wknd in Vegas!

Nobody's blaming Harper or Flaherty for the recession but we are blaming them for not planning accordingly for what had to be the worst-kept secret.

When you've known that the economic trend has been downward both here and in the US (our largest trading partner), you would be foolish to blow all your surpluses in one go.

Thank God it's only a minority government (which means we should get another chance to fix things in the next 2 yrs).

Laz in Finance
A little bit of facts: The last Canadian "true" recession was in the early 90's. Since then, we have had almost 15 to 17 years of moderate growth on average. In the tail end EXTREME growth. Unemployment was and still is at record lows? What do people expect...the gravy train to just keep coming. THIS IS NORMAL and it too shall pass. I have been reviewing old articles from as far back as 1973. Newspapers don't sell on good news people, bad news sells. Anyhow, all I have to say is, are you positioning yourselves for the next bull market or sitting on your hands in fear? How's that for a news article... perhaps I should write it..... but it isn't a negative article so I guess I am not hired.

JP
This is due to Harper. He sure has some business degree...doesn't even realize you need to make a profit in order to keep from going under!

Forest Gump
Like Shamaro said, let's just blame Harper and get it over with. We're Canadian, so we have to blame somebody.

And as I thought, there are a few of us here who are going to blame him for allowing Canadians to take back some of their hard earned tax dollars and spend it how they see fit.

Harper has had a plan and always has. People have to realize that they knew and planned for this slow down, they just didn't want to make it public, because as soon as a PM or a senior cabinet minister speaks negatively about the economy, it creates panic in the market place and the panic we see now in the market place, is because of the negative publicity the media is shoving at us day in and day out.

Believe me, there is money out there to be made and the rich are making it as fast as we lose it.

If we all want to survive this economic downturn, support your government. Instead of being a part of problem, try and be part of the solution.

To this day, I still can't believe how many people who have lived way beyond their means, blame the government for the situation they are in.

Jim
I went to Costco yesterday.... I didn't really see the effect of recession as people shop like crazy for Christmas already.

The bargain usually come bea few days before Christmas, it's still Oct...it costs people the most $$$ even in Costco two months before Christmas.

Housing price, autosales cannot keep going up indefinitely. The drop now will mean those 58% profit rise a few years later.

I feel sorry for those who lose their job. Maybe it is also the time to re-assess our job and ask is it a career than is going to last? or it will be replaced by machines within the next 2 years?

Also if we are going to blame Stephen Harper, we should blames G. Bush, G. Brown, and all country's leaders in the world.

keep it coming
I love all the doom and gloom. Not only is Canada in the best position for this but the CDN dollar tanks and I make a fortune. I will take 20% extra on my salary as stocks tank.

SE
JP
What are you smoking? This reporter does report the facts and quotes from those who may have an educated opinion. I saw no evidence of your accusation. Nor did I see any mole hills being made.

The only thing I want to say is that this maybe just a calm before a much bigger storm.

Socialism is killing us
I of course blame Harper and the Conservatives. I'm a Liberal sheep and will say and do anything Stephane dion, Iggy and Rae tell me to. I need someone to blame because I'm a Canadian and that's what I do. Now where can I pick up my welfare cheque?

Rebecca in Edmonton
All the central banks have been abusing the printing presses to add more liquidity to the markets. All that does is lower the value of our currency and feed the hawk banks' addiction to lending credit. This practice sends the markets into hyper inflation because our money isn't worth the paper its printed on. This is not our fault. This is being done to us.

Google: Denmark eviction riots.

It's starting. Don't say you haven't been warned.

And for those that don't like my scare tactics - suck it up.

Doug BC
While I can concede that this "crisis" has the appearance of being more serious than some we've had in the past,it also seems like no one on the planet yet knows where all this is going.It could just turn into an average economic downturn.But panic and fear mongering are surely counter producitve and clearly can make things worse.
And finally,am I the only one who thinks that it's a bit insane to think that spending a surplus by paying down our national debt,and stimulating the economy by lowering taxes IS NOT BLOWING THE SURPLUS??
We still have to much debt in Canada.And lower taxes are seen as economic stimulation by nearly every recognized economist.
We "waste" $40-$45 billion dollars paying interst on the debt every year.Let's agree to fix that.If costs of manufacturing are so high in Canada that we lose those industries,let's agree to fix that by lowering the costs we can lower.Since we don't want to work for Chinese wages,the only costs we can lower seem to be taxes and energy.Surely no one believes we can save our industries by sending them more cheques.Productivity and input costs are our only options.
We have been making progress on some fronts.And even though we have a long ways to go if we are to dig ourselves out of the hole we were in a decade ago,we can come out of this far better off.But we must avoid the welfare and nanny state ideologies.
In the mean time,buckle up for a volatile ride for a while.And try to prepare yourself to take advantage of the next "boom" cycle.It will provide many great opportunities.

James
We can blame Harper for part of this mess for reducing the size of the budget surplus. One thing that people don't realize is that every time a large surplus was achieved, all of that money went on the debt. Thereby, the overall debt was reduced, saving Canada a lot on interest charges. By reducing the surplus, the debt is not paid down as much and in these hard economic times, Canada will not have as much money for program spending because of the interest we owe. Not a good move Harper.

To JP - I must have been reading a different report because I don't see a bias on behalf of the reporter. What did I miss?

Flush!

Canuck in Bellingham WA
One of the really stupid statistics that people quote is how we are doing compared to 1 year ago. If I buy a house for $300K in 2003 and in Mar 2008 its worth $700K and in Nov 2008 its worth $600K have I really lost 15% of my equity?

Its stupid to say we are in a major recession if we are a little behind 2007 numbers but still ahead of 2005.

And DOUG BC - you say we must lower costs of manufacturing by reducing taxes and energy costs. How? You complain about the surplus disappearing but it comes from taxes and a good chunk of those taxes come from energy. Or are you suggesting tax breaks; which of course can mean the products can be hit with surcharges at the border. So we don't reduce costs, just move the tax income to the States. (Yeah i know this is simplistic, I can't write a 20 page analysis and have it printed here).

Tom Hawley
Shamaro
No one is going to blame Harper or Flaherty for the world situation.
If people are going to complain about them it will be based on them misleading us and spending the cushion that was set up by the Liberals.
By buying votes with an adverse affect on the economy via the GST cut I can only wonder once we go in to deficit how much more will we need to repay for Harpers self serving move.
Harper added roughly $2M in yearly salaries alone for extra MP's .Just to have more women.
He should have just replaced the poor ones with capable women or men.
So no one should blame Harper for global slowdowns but he should be held accountable for decisions within Canada.

Liberals bought our votes with the Surplus
James unfortunately all the money did not go to paying off the debt. How soon we forget about all of the Liberal payouts at the end of every budget year. The local cricket club in my city recieved 500K without even asking. The reality was the Liberals used some of the SURPLUWS to buy our votes. Lets not rewrite history here James.

Dayton
We live in a country where all the store shelves are stocked with food. I wouldn't panic about it. 1 50 lb. sack of lentils would cost you about $25.00 direct from a farmer. Feed one person 100 days or $.25 a day. Think about it that's 3 empty pop can's.

Blinded by the red ligth!
Why people continue to blame Harper for this is beyond me. Ok JP, James & ect. it is a global recession. You think Harper caused this global recession and loss of jobs? You think Harper can wave his magic wand and give everyone jobs? If you wanna blame anyone, blame wall street and everyone with them. Hey you can even throw all the major national and commercail banks of the world in there! Yes Stephen Harper caused these and other major factors of the worlds economic downturn to occur and create job losses across Canada. It was the scheme of the evil empire of the Conservatives. Where do you guys come from? Get out and step into reality.

Rod (Calgary)
Tom Hawley stated "No one is going to blame Harper or Flaherty for the world situation.
If people are going to complain about them it will be based on them misleading us and spending the cushion that was set up by the Liberals.
By buying votes with an adverse affect on the economy via the GST cut I can only wonder once we go in to deficit how much more will we need to repay for Harpers self serving move." Tom I guess you and your fellow Liberals, who are unhappy with the government doing what Canadians elected it to do should send back the money that you save on the GST reduction and we will pay your portion of the debit off then.

You went on to say that "Harper added roughly $2M in yearly salaries alone for extra MP's ." He didn't increase the MP amount (there is still 308 MPs) but he increased the size of the cabinet and it was the Liberal party that criticized the number of women that were in the Conservative party and cabinet. It is very hard to please you people.

John in Calgary
Adapt and overcome people. Lost your job? Well the west is hurting for skilled workers and they will pay to have them. Maybe it's just because I'm in Alberta but I read these types of news articles and we shake our heads and think "what the heck are you people talking about?" In Calgary we have a Transit system that is posting signs in the trains and buses for people to hire. We have a Police force that has stickers on all the cars looking for people to hire. Everywhere you look there are signs saying to "Appy within." You can't go to a resturant any more and get good service because Everybody is forced to hire and be thankful to hire anybody who walks in off the street. I'm sorry if you've lost your job, but there are lots of options out there. The only thing that is going to slow the economy down in Alberta is the lack of skilled workers. As we speak there are projects being posponed because we don't have the man power to do them.

Layton B in Moncton NB
Hey those are Augusts numbers, BEFORE the economy crapped its pants. Before the election call...hmmmm. I bet the economist(never had a job as one) Prime Minister saw this coming. What a laugh!!! He frittered away our cushion, the surplus, so now the government cupboards are bare when we really need it.

Todd
Just another example of our terribly-flawed immigration system, run by professional bureaucrats who are beyond reproach and headed by politicians who are too afraid of the being called racist to make any meaningful changes. I feel sorry for immigration workers who are caught in the midst of flawed policy promoted by lawyers looking for easy money without any concern about what's best for Canada. It's a sad joke!