Updated: Mon Mar. 02 2009 21:55:12

CTV.ca News Staff

Canada slid into a deep recession late in 2008, as the economy contracted at an annualized rate of 3.4 per cent in the fourth quarter of the year, Statistics Canada reported Monday.

That is the biggest decline since the recession of 1991 and sparked a sharp drop on the markets. At the sound of the closing bell:

• Toronto's S&P/TSX composite index dropped 435.51 points, or 5.36 per cent, to 7,687.51, its lowest point since the fall of 2003.
• Wall Street's Dow Jones industrial average fell 299.64 points, or 4.25 per cent, to 6,763.29, plunging below 7,000 for the first time in more than 11 years.

Economists have blamed the slumping U.S. market as the primary reason for Canada's sliding numbers.

"The United States has some pretty major problems, and by virtue of Canada's relation as a big trading partner, that hits Canada pretty hard," Eric Lascelles, an economist with TD Securities, told CTV News.

The Statistics Canada report also said that Canada's gross domestic product slipped by 0.8 per cent in the fourth quarter of 2008, with the decline increasing progressively with each month.

"Economists say the worst thing about it isn't how much (the economy) contracted, but the fact that December was so much worse than November -- in other words, we're not bottoming out," BNN's Amanda Lang told CTV Newsnet.

"But we are still much better off than other areas, including folks to the south. We just saw last week that their economy, in the same period, almost shrank twice as much."

According to Jeff Rubin, CIBC's chief economist, the recent drops in exports to the U.S. could become the new paradigm.

"A big part of that decline was a 50 per cent reduction in auto exports to the United States," he said. "Those kinds of declines may well become permanent."

Rubin noted that the Detroit automakers may slash another 200,000 jobs and close half of their manufacturing plants over the next five years.

Political fallout

The government's handling of the economy during this decline was a topic of debate in the House of Commons on Monday.

Liberal finance critic John McCallum said the prime minister had inaccurately read the status of the economy "on the eve of the biggest contraction of the Canadian economy in almost 20 years" last fall, and asked if the prime minister would apologize to Canadians as a result.

In response, Prime Minister Stephen Harper said that the Canadian economy had fared much better than the U.S., European and Japanese economies during the same period, and that "our economy remains in a position of strength."

The GDP decline

The GDP decline was largely due to slowing exports, capital investments and personal spending -- all symptoms of the current global recession.

While the GDP dropped in October, November and December, the decline was sharpest in December.

"The economy deteriorated at a very rapid rate at that point. In that one month we fell by one per cent. That's a huge one-month decline for any economy," said BNN's Linda Sims.

She told CTV Newsnet that the losses were "across the board" with the only growth in the economy observed in the public sector.

"That means that if it wasn't a government agency or the government itself, it wasn't growing, it was in decline. That means the markets, consumer spending, manufacturing, imports, exports, you name it, were shrinking."

The fact that declines are being posted across all industries makes this one of the most widespread recessions in nearly two decades.

Exports of commodities and minerals to China are also down, further weakening Canada's numbers.

"So this is the first time where it's really starting to hit everywhere at the same time," Colin Cieszynski of CMC Markets Canada told Newsnet.

"So this in a lot of ways is the first major recession we've had in Canada since the early 90s, considering the last one seemed to be more concentrated in a few sectors, such as technology and telecom."

The numbers

Both domestic and foreign demand for goods declined, which means production fell by 2.4 per cent. All goods-producing sectors posted declines, except for agriculture, including:

• manufacturing, which fell by 4.7 per cent
• service-producing industries, which were down 0.4 per cent
• automotive products, which posted a 19 per cent decline in exports
• housing, which crumbled by 22.1 per cent

Statistics Canada also reported that imports to Canada fell faster than exports. However, the decline in the volume of products coming into the country, and going out, were the largest since 1982.

Despite the seemingly dismal numbers, overall in 2008, growth was still positive, with a 0.5 per cent increase to the nation's GDP.

And while Canada's fourth-quarter drop in GDP may sound dramatic, the decline is not as sharp as in the U.S., where a 6.2 per cent decline was registered.

The European Union reported an annualized decline of 5.9 per cent, Mexico's was 10.3 per cent and Japan experienced a massive 12.7 per cent plunge.

Derek Holt, Scotia Capital's vice president of economics, told the Canadian Press that the news will likely lead Bank of Canada governor Mark Carney to cut interest rates by half a point on Tuesday.

That would put Canada's overnight rate at 0.5 per cent. However, it is unclear if cutting interest rates would have the same effect as in healthier economic times.

With a report by CTV's Robert Fife and files from The Canadian Press

Comments are now closed for this story

So What???
still not as bad as 1991...Facts are there people. Blame Harper...Blame Bush, soon you will be blaming Obama..Governments spend too much, recession lasts longer.This is life.

@Robin in Sudbury
THE PEOPLE ARE TOO DAMNED LAZY TO INVESTIGATE THE TRUTH!!!!
If everyone learned the truth there would be a revolution in the morning. (sound familiar?)
People refuse to wake up. THE GLOBAL RECESSION HAS BEEN BROUGHT UPON US BY THE GLOBAL ELITE. And I don't care who calls me what because I KNOW. Just remember, when they announce their miraculous solution to this crisis, A NEW NORTH AMERICAN CURRENCY, and the new NORTH AMERICAN UNION, remember - WE TRIED TO WAKE YOU UP.

Harper is a liar
Afew months ago harper was telling us that everything was fine. If he didn't see this coming, he's either very incompetent, or if he did, then he was lying to us.

BobKnows
Dear Mr. stop complaining. Here is your hint. BUY GOLD AND/OR SILVER. And keep it at home. Thats it. Another (and possibly better) option is non perishable food items.

Dave LaFontaine
Dave Ont.
If anyone did not see this recession coming by yourself, you must be blind.

I think after its all over we will find it was the best thing ever , because it will more than likely cause the rich to join the average Joe when it comes to struggling to keep a dollar in his pocket.

Maybe now the big shots will learn that the average worker is what makes the world go round.

I don't trust any politician and it is too bad Canada does not have even one good one who will think of us instead of themselves.

I payed off everyone I owed before this hit and now I,am going fishing and relax, till the dust settles.

Stay safe & relax.

Frank in Calgary
I think we're seeing the end of another empire.

Just like Eastern Europe being shook up by the fall of the mighty USSR, the whole world is going down the toilet with the fall of the US.

It's very unfortunate we happen to just be the biggest nieghbour to the US but a new order will come out of this.

The US will struggle with this for a long time but the rest of the world will regroup.

Others will want our resources. True manufacturing
will continue to go down but we need to concentrate on what made Canada great in the first place. We are still
the second biggest country in the world thanks to all the land we have.

In a matter of a year or two, others will want what we grow,cut down,dig up or pipe out. Meanwhile all that stuff that's been around for decades to billions of years can stay where it is for a couple more.

CC
To all the Harper bashers. Canada is still in twice the position as the other developed countries.
NOBODY new that this was going to be as bad as it is. It changed by the week, if not the day!! But yet, you blame big bad Harper with a minority government. And anyone who says that they new it was going to be this bad, is lying. Canada sits better than anyone, and yet you still complain. Sickening. Harper showed leadership for the people of his country. Perhaps some of you should go look around the world at what's happening..maybe you'll see just how good you have it.

Alex Roberts (Halifax)
These are horrific GDP numbers, but I am NOT convinced the Harper administration has the mind-set do what is needed to right our fast-sinking economy.

Harper's Machiavellian lust for power always seems to trump doing the right thing for the right reasons. Even now as our economy is contracting at a stunning 3.4% annual rate, and he needs the support of the opposition parties to move emergency legislation forward, he’s is planning an attack-ad campaign against Iggy.

Is this the sort of mean-spirited gamesmanship we need at this time? Did Harper not learn anything from the recent coalition fiasco? Is this a man who actually "gets it?"

Betty
Things can't be rosy all the time. We are a spoiled generation. The huge credit bubble popped, and boom is bust, the good times came crashing down. Everything goes in cycles. The trick is to save money during the good times to get you through the bad, but hardly anyone did that. Now they have no money and some have lost their jobs. Will we ever learn.

Joanne
I personally think the media is making the so called recession alot more gloom and doom than there's actually there. There are still people and lots of them travelling to the south for holidays, and still tons of people spending money on frivilous items and even big ticket items, so tell me where the recession is??

Marc Kingston
To all you Political bloggers, I dont think i said harper was great. I said a good PM reassures a population in times of crisis. It is a sign of leadership. To spread fear is never a good thing for a leader. Particularly when it comes to the economy. However if we must get into specifics our economy is still out performing any other industrialized economy. Our decline is about half of any other developed economy. So is the current government just lucky? Or perhaps they did do something right? Why can't people take the facts as they are? Our economy compared to everyone else is doing OK. I am just willing to give credit to the current leaders of our economy. The reality is we need to stop the partisan politics and work together to get through this. I know you political bloggers on here all know each other, but I am just and average educated Canadian that can see through the political drival and i am capable of making an educated assessment on my own. A decline of 3.4% inb Canada is better than 6.2% in the US. 5.9% in Europe, 12.7 in Japan or 10.3 in Mexico. I may not know how to spin your political double speak but i do know how to read numbers. Like it or not, and I suspect you dont like it, but our economy under the current government's stewardship is doing OK.

Larry I ontario
So much for Harpers comments one week before the election:he said; "We will not go into deficit spending."
Time to turf him out since he is a liar!!! He has done a terrible job managing the economy. Lets give the Liberals a chance to turn it around as they did in 1994.
We have the worst finance minister on record. Mr. Flarrety bankrupted Ontario and now he is doing the same with the country. We need a fincance minister that has confidnce...lets try Jim Prentice since he steps into jobs that other ministers screwed up and fixes the problems. This government is doing nothing but talk and no action! Turf Harper out now!!

AJ
Maybe it's time for the man who wanted to be king to go.
He either didn't see this mess comong in October or knew and for his own personal power grab lied to Canada.
This is the same man who withdrew promises to NL and NS
The same man who said that he would reform the senate and make it an electorate choice.
Then appointed his best friends to receive millions of dollars of taxpayer dollars in salary, expenses, pensions, etc.
It's time to replace Mulrooney with Harper as the 'WORST' prime minister Canada has ever had.

Dave in Courtenay
We have undervalued personal independence and over-valued being our brothers' keeper. People have fled to cities and specialized to single capabilities, which indeed has provided greater collective capability and wealth. Easy credit has allowed these same people to promise to do things in the future for loans to enjoy the good life today. However, when no one wants the single thing you can do, you are toast. We have bought the message that governments at all levels will save you. Better to learn from emergency preparedness for earthquakes and tornadoes: organize your life so that you can survive independently through times of social upheaval. Next time.

Cornwall Bob
Isn't it just wonderful listening to all the armchair economists on this site spouting doom & gloom. If you are all so smart and think you can do better then let's see your names on the next ballot.

Bob in Harley
Do you really think that Canada is immune from a world recession? Think positive the upturn is right around the corner.

Time for EVERYBODY to WAKE UP
Personally I found it very disappointing that BOTH Finance Minister and Prime Minster WERE IN DREAM LAND for the past year! Thought they both had Finance Degree at school!

Sick of people comparing our financial problem is NOT as bad as the United States or other country around the world. Are we suppose to cheer on that? Aren't we suppose to FOCUS on our problem and try to fix it before it's too late?!

STOP THE BAILOUT/LOAN to any bad manage company include GENERAL MOTOR! Their problem is coming from THEIR UNION MEMBER IN THE RETIRE UNION MEMBERS who still want to have the free Medical Bills pay by General Motor. Something like making $1,600 NET PROFIT for EACH CAR in order to pay off the Medical Bills for the Retiree Union Memeber. Just do your math and see how STUPID the solution is????!!!!!

We as a middle class taxpayer are still supporting the rest of the country. But worry about the job security that you still have won't help! The only way you can protect yourself is NOT USING YOUR CREDIT/DEBIT CARD!

Seriously, make sure you have the money to pay for rent/mortgage and food on the table are the most important thing.

Start learning how to budget and pay EVERYTHING IN CASH! STOP GOING TO WAL MART AND GET ALL THE JUNK THAT YOU DON'T NEED! FOCUS ON YOUR FAMILY AND TAKE CARE OF YOUR HEALTH!

Forget about R.R.S.P., Dividend, G.I.C. etc. Put your extra money under the pillows and you will sleep better!!!!!

Forget about the Government. They WON'T/CAN'T help us. Only we can help ourselves!!!!

stop complaining
What a bunch of arm chair critics... pretty easy when you have hindsite (20/20).
Nobody and I mean nobody (including leaders of the have not parties) had any idea it was going to go so far south.
By what people are saying, it should be easy to know where we are going right now... so come on folks you seem to know everything - when should I buy a bank stock or any stock?, is it going up today or tomorrow... come on give me a hint.

Now the real world. You only know what is going to happen after it happens. Until then you go with what you know (best guess) and what the "experts" are telling you. But even they get it wrong sometimes.

Stop trying to blame someone for this mess - lets just be ready to go when things turn around. And don't do a knee jurk response like the opposition keeps forcing down Canadian throats.

JEP
The more stocks go down, the more money I make.

I love this.

TVic
Thanks Mr. Harper - at first you denied it and now you are doing nothing about it!
And soon you will be slinging mud at the other guys in an attempt to duck the real problem - YOU!!

JP
Sheeple. Too many of them everywhere.
Fod God's sake, I went to Ikea on Sunday and the lines there were 30 minutes to get to a checkout, and that's with 10 lanes!
When you sheeple stop the fear mongering, things will get better. Cosumerism will never stop.
Media spin controls sheeple, so don't be one.

Nostradamn
S in S, you are so true. This IS only the start, the worst is yet to come and people will be shocked. The poor in the world WILL fight back and take back what is rightly theirs. The rich Ceo's are in for a shock when people rip their homes apart to get what's theirs. Obama will be gone and the US will fall.

JEP
I pay my tax dollars, I damn well expect these politicians to predict the future. For them to lie and tell us that Canada's banking system is in good shape DESPITE THE FACT that the US's banking system is in bad shape is an outright lie.

Joyce.
Mr. Hitchings has forgotten that Mulrooney set the stage for the economic welfare of this Country, by implementing the GST and the NAFTA Agreement, which incidently Chretien Campaigned against and he lied to the Country in 1993 when campaigning for the Election.
Mulrooney set the stage for the Liberal party to cut the funds to the Provinces and the Taxpayers and the Municipalities and used the EI Fund to balance the books on the backs of the taxpayers.
The Taxpayers bore the brunt of their policies, if that is what you say the Liberals did then I whole heartedly agree with you.

Harper wears the C-label on his party.
Therefore, anything he does about anything should never be criticized . . . because I am stoopid.

pepsi
I have to laugh at the bunch here defending Harper and his Neo-con policies. Did you see what happened to our cousins in the south? Far right thinking got them were they are today and it’s going to be years to clean up the mess. They took the regulations off of banking so they could offer sub prime Mortgages to people who could never pay them back. If the Reform-Conservatives were in with a majority a few years back I don't think they would have stopped the bank mergers like Paul Martin did. We would have been in the same boat as the States. The only bright spot I see on the Horizon is knowing that any chance Harper had of getting a majority is gone forever…Heck a third minority isn’t too likely either.

Peter Chamberlin
The belief, that property is more valuable than human life itself, is the basis of humanity’s current problems. Capitalism, the embodiment of this belief, is in its death throes.

Jay, Ottawa
edd-medhat said, "Just keep blaming Harper. God some the you bloggers are thick."

They're not blaming him, they're exposing his hypocrisy. He said this wouldn't happen.

So was he way out of touch, or just a liar?

Jay, Ottawa
This must be incorrect. Stevie Harper said it wouldn't happen.

PrairieDog
It truly is amazing to sit in Saskatchewan and really not feel what is going on in the rest of the country. I feel terrible for the jobs being lost, the bankruptcys, etc.. Saskatchewan still has job growth, a surplus in the billions, and consumers..still consuming. I urge others that have lost their jobs to come out and find some work. Move west young man...move west.

Socialism is killing us
Recession or depression in Ottawa? Not when you have to wait for a table in a restaurant for up to 1.5 hours. House prices have increased in the Ottawa area. To all the bozo Liberal supporters, your fearless leaders like Iggy and Dion have their heads stuck in the sand not doing anything. But I guess you can't see that because your heads are stuck even deeper.

No, Keynesianism had nothing to do with mess.
The global economic meltdown is due to over-priced mortgages being used as over-leveraged securities by high-finance scammers.

It may or may not be a good idea to apply Keynes-style measures to clean up the mess, but that is a separate issue.

Jay
No recession ever.

If we there was going to be a recession we'd be in one already.

Harper will wear those statements for the rest of his life. What blatant lies.

Alexander M
I saw this recession coming way back in July. I'm not an economist. I don't even have a college or university education, yet. So I think it shows just how great of an "economist" Stephen Harper is to say as late as October that the Canadian economy was going to do fine.

Sure, it's better than most other economies in the world, but good would not be the word to describe the current state of the economy.

stu
I cannot believe that in our current situation someone actually has the audacity to quote John Keynes as some kind of authority.

Is it not Keynesian Economics which lead us to this situation?

LJ
I don't understand why people are so against GST and general tax cuts and corporate tax cuts? Do you not realize that giving corporations tax cuts gives them more money to hire more people? Where do you think jobs come from??? CORPORATIONS! Also, Harper promised to reduce the GST, it was one of his election platforms meaning one of the reasons he was elected was likely this promise. At least he followed through on that promise, unlike others who promised to cut the GST entirely and then never followed thru when they realized what a nice cash cow the GST is. Reducing the GST means I have 2% more to spend on other things, I'd rather keep my 2% than let the government do something stupid with it. So let's all spend our 2% extra cash and help out the economy!

robin sudbury
well well well where to start. first off blame should go where it belongs. i make this suggestion. investigate for yourselves the money system and you will find the answers to this economic meltdown.
knowledge is power!!!!

John Klassen
We are seeing some light.We have jobs to tender and if more infra-structure is brought on line the construction industry can get us out of the recession by the fall.Construction jobs stay home and the materials we buy and need will quickly get manufacturing on its feet and will deplete the unemployment line.Just keep the money for infra-structure moving and then we tackle more social programmes when we get going.Think positive!

Red X
Marg. The Conservative Fall Economic Statement did little. Too bad there was no confidence vote allowed...

The Budget year starts on April 1st. So it will be a while. Whenever the Head of State, Michaelle Jean signs it into law. It's the Harper Gov't trying to ADD $3 Billion in Slush Funds CHANGING the Budget.

I would create Jobs & Homes with affordable housing projects thereby solving 2 problems with one move by PM Red X.

Starvin Marvin
I predicted this to my boss in the summer of 2007. Told him we needed to reconsider the 2008 sales budget forecast. He thought I was crazy.
Jeez, I hate being right all the time.
It is only going to get worse as people react to the numbers and press articles.

Pete Jackson, Phd.
What I want in a leader is honesty! Stephen Harper is just beginning to learn the value of being straightforward and honest with his recent comments about Afghanistan. However I dont think I can trust him anymore. He lied just too many times to serve his personal selfish interests. Just a couple of months ago he continued to say that Canada would avoid a recession. I remember the way he attacked the gentleman Stephan Dion saying that he was cheering for a recession, just because Dion said the obvious. No, I can't trust him! There is just too much politics in his blood.

Jackie Barrett
While I know the global recession is not just a Canadian problem, Harper's poor economic management including GST reductions and tax reductions to greedy companies contributed to this economic freefall in the first place.

Furthermore, Harper's "divide and conquer" politics, which is hurting Newfoundland and Labrador, is also making things worse as investors want to invest in a politically stable economy, not just a well managed one.

With Mexico and Japan now in "Technical Depressions", Canada must now be more diligent to avoid a "depression" scenario, and start focusing on economic recovery.

Rick in NB
@ Marc Kingston:
Oh Roger T gets economics. He just bitter like the rest of us.
But with your twisted
explaination of how great Harper is, I have a good idea of how much you know.
He stood in front of us all and lied.

Red X
Simon, 0.85% times 4 quarters = 3.4%
Harper also spoke about buying opportunities last fall but the TSX and housing is lower, TODAY.

Data in May will show a decline in the first quarter of 2009 which would mean a Cdn recession beyond the spin.

Look for the Labour Force numbers this Friday as an indication of where the Harper Gov't has taken workers...

Marg
To all of you who are in opposition to the Conservatives, why don't you get your MP's to get their act together and stop "pussy-footing" around in Parliament, so the budget can get passed and our economy can get moving again!!!! It is clearly the opposition that is holding everything up, so all of you that have better ideas, let's hear them, this is just getting rediculous. I thought the Liberals voted to pass the budget, why all the hold up now. Put your money where your mouth is, and get on with it!!!!!.

Walt the Duke
This story just proves the Harper lied to the Canadian people last fall. He said the government was dysfunctional and broke the law when he forced an election. The reality was that he knew there were deep financial problems but lied about them to try to get a majority government. He lied for power!

Since then he has been engaged in delaying tactics instead of addressing the issues. He cut and ran from a non confidence vote and locked up parliament. Is this the conduct we want from our government? Or is it the petty, mean spirited attitude of a power hungry party intent on retaining power by any means!

AJW
if the wealthy people started spending their money the economy wouldn't be so bad. Also the banks should be foreced to start lending to people whose jobs aren't at risk. i.e. public servants. there's lots of wealthy people on that payroll. Also the only reason that sales dropped off in Ottawa in December and a higher unemployment rate was due to the bus strike that lasted more than 51 days. There were people willing to spend but because they did not have transportation they couldn't get out and about to spend their money.

aroberts@hfx.andra.com
I'm not blaming anyone per se: this is global recession, and there is little Canada could have done to head it off.

That said, the Tories have been VERY late to the table, and still don't appear to appreciate the gravity of the situation. To some extent they are still playing politics when serious and profound solutions need to be found IMMEDIATELY.

As little as three weeks ago the government’s economic projections were way off base, and included almost laughable assumptions with regards to GDP projections, oil prices, etc.

For someone with some training in economics (Harper has an MA in economics: not the PHD some Tories would have us believe), but his outlandish and misguided stock market predictions, and general lack of foresight, are indicative of someone who didn't pay enough attention in economics class.

That said, its time for all the parties and leaders to put aside the gamesmanship and petty politics (especially Mr. Harper), and set about sorting out what is an economic mess that is growing worse by the day.

KJ in Kingston Ontario
That decline in the market is so depressing.... Happiest day of my life will be when I can sell off the last market related investment I have and quit watching the stock indexes every hour. It migth be many many years from now I fear.

Red X
Doug; a Depression would require the GDP to fall 10%.
The stock market may have tanked but we still have buildings, roads and human resources. Early retirement is still an option. The younger worker has mortgage payments, furniture and family purchases but has the least senoirity...

The proposed tax cuts will likely go to paying down debt, savings before being spent on products made in foreign countries/HQ

Simon
Hey guys,

I was just hoping for some clarification about why they put this statistic as an "Annualized Rate" and why that number is more appropriate than the actual quarterly loss. Does anybody have ideas about why this is prefered? Thanks a lot,

Doug Anderson
We are heading into a depression... there is no amount of positive spin that is going to stop it. People better wake up and realize that the markets/oil/housing values and even food prices were all inflated. The loose mortgage laws started all of this by inflating the housing values, the rest followed. The bubble has burst, and we need to realize that it was only that, a bubble.

That is going to be a hard pill to swallow for many, seeing that they are now locked into a mortgage that has a higher value than their home has on the market. The consumer was paying too much for everything, while at the same time our salaries never changed. The banks will still get their profits from the high mortgages, the oil companies made their billions from the inflated price of oil, and now the consumer will be saddled with the hardship of the depression as now that retirement plans have been cut in half, disposable income is dwindling, and the constant layoffs keep removing more and more money from the consumers ability to spend... there is no stopping it, the depression is here.

Bailouts of companies doesn't put money into the hands of consumers who drive the economy. Any future bailouts need to be directed to the people... tax rebates for 2008, EI increases, student loan bailouts, oil rebates, put money into the hands of the people or the bailouts that have already saddled the taxpayers with debt would have been pointless.

edd-medhat
Just keep blaming Harper. God some the you bloggers are thick.

If Harper and the Conservatives hadn't been there, we would have the same global problems coupled with the Green Shaft and higher corporate taxes resulting in even greater job losses.

Some of you are demonstrating your age to be the same as your IQ.

Tono
In my opinion, the main reason for Canada's economic recession is due to its voluntary inflexibility in trading partners. If all our resources are going to the USA, which is based on consumer demand and mass production, without doubt our economy will go where it goes. We need to invest more in growing economies, such as China.

CAPTAIN CAPTAIN, MAJOR CAPTAIN
Funny how it's all these Pro-Harper conservative comments that come out from EX-soldiers… Like that is going to sway public opinion. Harper has no money for the military and you know it. He has promised the military everything and then once in power realizes what every government before has known that the easiest budget to take money away from is the Military.

Where's your Heavy Armed Ice Breakers to protect our Northern waters? These Promises were made by Harper in 2005.

1. Stationing three new armed Heavy ice breakers -- to be made in Canada -- in the area of Iqaluit 2. Building a new military/civilian deep-water docking facility in the Iqaluit area 3. Establishing underwater listening posts to monitor northern waters for foreign submarines and ships
4. Building a new Arctic army training centre in the area of Cambridge Bay on the Northwest Passage
5. Stationing new fixed-wing search-and-rescue aircraft in Yellowknife

NOT ONE OF THE ABOVE HAS HAPPENED as for the new "heavy" Ice Breakers… they are no longer "Heavy" but "MEDIUM" ICE Breakers, Called by the Navy as "SLUSH BREAKERS" and are useless 8 Months of the year.

I am not an ex-soldier, but I know many and not too many have been pro Conservative… Seems to me their was no love loss between HILLIER and HARPER.

Red X
Marc & Gareth, someone Red X has said on these comment boards that we(N.A.)were headed for recession. The Oil(Commodities) Speculation masked the state of the Economy/Nominal GDP...

The Harper Gov't failed to Act by calling an early Election & Prorogation. So after 2 Conservative balanced budgets they are projecting a "temporary deficit" of $85 Billion plus Interest that will be added to future generations to the Debt.
Harper is an economist?!

Wayne
All I can say is thank god we have Harper as PM as Conservative policies have helped us to be the best equipped to deal with this crisis and our PM has clearly and for everyone to see, as well as americans acknowledging the fact, dealt with this sitaution better than any of the other leaders. I am looking forward to Harper working with Obama and between us obve the next year or so dealing with this and getting back on track. Despite the occasional harper hater .. has anyone noticed how insulting some of them are? I think people need to wake up and acknowledge reality and thank your lucky starts Dion and or Iggy are not PM can anyone honestly imagine them making the tough decisions?

Kevin in Toronto
Phil, the 6.2% reduction in the United States for the 4th quarter is at an annualized rate.

Not worse one?
The economy is not worse in Edmanton? After your energy revenue declines to deficits. People's saving has been plunging by 40 %. and with staggering job loss. Is it not worse one?

Retired Soldier in Kingston, ON
To Gareth Hitchings:
My dear Sir - thanks to out of control "Whiz kid Quants" on Wall St, the world is facing its greatest financial test in generations- probably since before the Great Depression! Consequently, as citizens we need to support Stephen Harper and his government!

Its "wonderful" that you're an economist; however, I would like to point out that, like our PM, very few economists with the exception of Nouriel Roubimi of New York saw the financial crisis coming or more importantly, had the courage to speak up about out of control speculation
on global stock markets!!

Now, ref your comments about the PM lying; my friend, all politicians at one time or another stretch the truth during times of crisis! Its how they maintain Law & Order & retain power!

If they did'nt misrepresent the truth at times, like the famous Kim Campbell(she of approx 3 month Prime Ministerial fame) voters would ensure they NEVER get elected because voters have an aversion to hard choices -or the truth for that matter!

Taxpayers,(especially municipal politicians and vested industries) prefer to be bribed with their own money due to previous Liberal governments fostering a "culture of entitlement!!

As a soldier who lived through oprressive budget cuts by previous Liberal governments in the 1990's, I would hope that our economy can get fixed. But, casting aspersions Ottawas way is not going to elevate this debate or more importantly, find solutions to pressing problems!!

Pro Patria

Gregg in Edmonton
Economies fluctuate in cycles and this was bound to happen as the last 14 years of positive growth was an unusually long stretch. We will rebound once the US gets their house in order and learn from their mistakes. I'm thankful that our economy and banking system is doing so much better than the rest of the world. We're so much better off compared to the USA, UK, Ireland, Germany, Iceland......the list goes on and on .Our Liberal and Conservative governments put in the proper banking regulations to protect us and Conservative's gave tax decreases to lessen the blow during this world-wide downturn. I look at these statistics with a positive light even though they certainly aren't ideal.

DEBT-FREE come before Ecomony!
Scary because half of employee at my plant were laid off on last Friday.... Now I am tight on cash and trying to repay my debt but now all of my friends/family who loaned me a small amounts of money in 4 years ago started asking for these money today.....

I guess everybody are in dire situation and may be worse than offical would thought.

Saving come before ecomony (damn wrong!)

Lets start say "Debt-free come before ecomony"

That way we should be.

Doug C
Wow...3.4% perecent and that was between 3 & 6 months ago...talk about forward thinking!!

There are 2 types of economists

[1] Those that don't know
[2] Those that don't know that they don't know

I've been tru 3 recessions and this one exhibits a 'classic' pattern [general sentiment....the sky is falling!!!...we're all gonna die!!....run for the hills!!!]. When the bad news just gets started then start worrying because we've got a long way to go. When the news gets really, really bad get ready for a sharp and often dramatic change in direction for the better.

The media focus on 'old' news. All the data that is refered to as current is actually between 2-4 months old on average.

I challenage anyone to go back and read the news articles or op/ed pieces from the last 3 recessions, and particularly the early 1980's to see just how easily the articles & sentiment of that time period fit 'perfectly' into today's headlines [in fact, looking back at 1981,82 I would say we were a lot more pessamistic then].

Remember, wealth doesn't disappear, it only changes hands. During times of fear [recession] the greatest amount of wealth will change hands. Doom and gloomers like to sell themselves short and run for the hills as fast as they can. Great news for those who can see past the headlines and actually use their brains for some good.

Ya, I'm an optimist!!...I've tried the pessamist thing but it yielded very little in terms of just about everything.

Linda in Vancouver
Lots of people here should be running for PM.It seems we have more economists in Canada than Carter has pills.
From all I read,the truth seems to be,than no one knows for sure how to fix this global crisis.That would include the leaders of all of the parties in all of Canada.
To many people and to many governments in to many countries spent 5 decades living on borrowed money,and now,all the chickens have come home to roost.The people who borrowed all that money are either unable,or unwilling to pay their debts,and in doing so,are bankrupting those from whom they borrowed the money as well as the next generation of taxpayers.
People who don't think Mr.Harper fully appreciates the seriousness of this meltdown now seem willing to elect Mr.Ignatieff,who is already talking about more very expensive social programs,and even more spending.
I don't know about everyone else,but when I find myself in a hole,I quit digging.If we have another election soon,I'll be looking for the party that DOES NOT offer more "free" programs because I know very well, THEY ARE NOT FREE.
As I recently read,"if someone is receiving something for which they are not working,somewhere else there is someone who is working for something he is not receiving".
Harper's road to lower debt is a long and difficult one.But it is clearly a better choice than the one that leads to governments that confiscate more of my earnings so they can give them to someone else.
Both political parties MUST embrace debt reduction for Canada or our children will have an even tougher time than we are now.We must pay our own bills,aqnd we all know the socialists will make no effort to do this.

terri
I am with you Stefan. The blogs used to be the best of the best but now all I read is doom and gloom, I think I may have to give this up as well. I don't buy papers, I don't listen to the news on tv. I read the blogs and sift through it to get my own ideas about things. I have to skim past the (Harper is at fault for everything)I guess living out west has jaded me to the Liberals for the rest of my life.I don't consider the ndp or green party relevant at all.But at least CTV gives both sides a chance(even though more than half are ndp,green,liberal and conservative hacks)I guess I will keep sifting through it anyway.

Statman
Phil said:
"Decline of 0.8% in Canadian Q4 versus a decline of 6.2% in American Q4. Some Asian and European countries had a decline of anywhere between 5% and 10% of GDP.

We're the best of a bad bunch."


Better review your Eco 101 notes, Phil. The Canadian economy contracted at an ANNUALIZED rate of 3.4 per cent in the fourth quarter of the year. It was down .8 in the last quarter.

Besides the worse it gets in the US, the worse it will get in Canada. After all, they are our #1 trading partner.

Hubert
I am amazed at how little those who would seek to influence public opinion really know about the seriousness of the matter at hand. Over the past six months I have listened to the prime minister , the finance minister, economists and know-it-all journalists attempt to rationalize what is going on with the economy. Their analysis and predictions speak of , at best, incompetence and, at worse, down-right unthruths. Just before Christmas my government told me not to worry, we are in great shape. Our prime minister would never entertain running a deficit - in fact we would continue to run modest surplusses. Two months later the credability of their utterances are "sounds of fury signifying nothing". So now, to heck with the economy lets's put all gang murderers in jail for life. I am sure the gang murderers are quaking in their shoes!!

simon
What was Harper doing in the last quater of 2008?

He was saying that the fundamentals of the economy was strong.

And when it appeared that he was going to loose his own job, he prorogued parliament!!!

He has no iota what to do about this economy.

Geog
On another page you can read about the "AdBusters" and their vision of a society NOT based on materialism. Capitalism is built on the "spend-spend-spend" philosophy.

It could be that most people (>50%) have finally woken up and are hunkering down....and REFUSING to 'buy in' (pun intended) to the Caplitalists and Big Business ever again.

If this IS the case, and that's how it's looking, what does this do to Barack's and Steven's billions of $$$ of "stimulous"? It's a complete waste of time and money! It just won't work.

We aint ever going back. Thankfully! (Oh, and the environment is breathing much easier these days too!)

Corey
It could be worse. I mean we could have a 14 trillion dollar debt to pay off.

I just don't undersatnd how throwing billions and trillions of dollars is going to fix this recession. I mean, sure it will help in the short term, but who is going to pay for these budget deficits. Politicians. No Big Business No Middle class tax payers. Yes.
The burden we will leave with our kids and there kids will be staggering. It will stifle there oportunity for growth and good jobs.
The Govt has to cut back on wasteful spending. I don't mean health care, education etc, I mean things that really have no business being paid for by tax payers. Once the government starts to act responsible, than so will its citizens. The years of waste and corruption will hopefully come to an end, but sadly that is being to optomistic.

Gail (Hamilton)
Blaming PM Harper is nothing more than partisanship at it's worst. Our world is changing before our very eyes economically, and financially, and it all started in the US. If Canada's exports continue to decline and the markets don't improve, it's not one person's fault. Canada's banking system is the best in the world; however, with other forces at play we are caught up in this global economic "war" with our prosperity being challenged in favour of levelling the playing field. People should not only hear what is being said, but need to listen and understand the messages regardless of the wording used. This is serious and we have the best fiscally conservative leadership at the helm for these trying times, who unfortunately are battling against opposition parties who are eager to join the "spread the wealth" strategy permeating the globe.

Reece
I'ts not the best time to sit on your hands, Harper. Don't wait for somebody else to come up with a creative solutions.

My bet is with Obama to crush the special interst groups and find our way out. I've given up on Harper.

Terry a real Western Canadian
It is a little sad to see Harper supporters spin their views about the true health of the Canadian economy with rosy shades of denial. Just watch the real world news, and one can see that Harper still does not have a clue. The problem is that people have to change before the economy will improve, as fiscal irresponsibilty (too many people living beyond their means) is what caused the whole problem to begin with. Bad government. no leadership (a moronic PM and his dimwit cronies) and corporate welfare has only crippled our economy further.

Dennis L. Krahn
Gareth Hitchings:

You are a Canadian and an economist; you obviously are not a Harper fan, and you are someone who believes in truthfulness.

What is your solution to improving the current situation?

Stefan Polacek
If media would keep there mouth closed about the world is coming to a end for six months I think the confinence would be alot better. I find media scares the people to much. TOO MUCH NEGATIVE start saying postive things we need that. It's like if someone told you that you are ungly for 1 year at the end of that year you think you are ugly will that is what the media is doing so we start to be scared and not spend. Since media started that the world just stop because everyday we here it. Lets start thinking postive and the ones that are more stable will get the world moving again and then everything will start to follow on a postive way. In my stimulas package you don't need billion, just getting the the media talking postive because not long ago everything was just okay until after July everything just stop.

BMIA
It's been 5 months already!

Yes, we know the rhetoric put forward by the various parties of our government during the election campaign! Is it completely lost on you that we absolutely know what was espoused 5 months ago and have been reminded of it every day since? What else is lost on you (rhetorical question since you obviously won't know the answer to it)?

We've read - ad nauseum - people commenting on that very fact for the past 5 months! It is nauseating! It is destructive! And it is plain ol' useless!

Anyone who still insists on writing those sentences recalling back 5 months ago is nauseating, destructive, and plain ol' useless!

We are where we are - today - and going forward tomorrow. Stop with the rhetoric about whining about yesterday. You sound like a bunch of Canadian politicians who insist on whining about the past - and do so relentlessly!

I enjoy thoughtful, insightful, and constructive discussions, the rest are bordering on infuriating - same as my feeling of our politicians.

Tim from Calgary
Those who blame Harper and his government for this don't know what they're talking about. Until the US economy recovers, our economy will also slow and even retract. With 300+ million customers in the States not buying, our economy will not find the buyers for our products. As the US recovers, so will we. Blaming the government for this unavoidable recession is just silly and shows the commenter's ignorance of the global situation. Canada is not an island.

raj
Harper still thinks that Canada has an 8% growth, not negative 4%. India is the only country in the world with 8% GNP this year. Harper should take note and learn from the Indians. It is the only way to help Canada.

John M
As demonstrated in this article, the only way to protect Canadians from a recession is to drastically increase the size of the government. And by increasing the government size by 31% over three years, Harper has saved countless of job.

Eric
I address the following quote to those who accuse our PM of lying when he, like economists all over the world, was unaware of how bad the economic situation could become:

"When the facts change, I change my mind. What do you do, sir?"

John M. Keynes

Phil
Decline of 0.8% in Canadian Q4 versus a decline of 6.2% in American Q4. Some Asian and European countries had a decline of anywhere between 5% and 10% of GDP.

We're the best of a bad bunch.

Kris
I love how even when the whole country is seeing job losses and reduced spending, somehow the government manages to get bigger. Civil 'servants' certainly know how to protect themselves at everyone's expense.

The Other Lowell from BC
The recovery process will largely be dependent on disengaging more from the united states economy. I think China will be one of the first ones to come out of the recession and Canada should be focussing more attention on Chinese and other asian trading partners to generate some stimulus. This is where Harper is falling down. Because he governs more on ideological principles, and less on pragmatic ones, He has been missing the boat on building better trade relationship with China. Reliance on bureaucrats to build a chinese rapport has not done the trick so far. The Chinese leaders see that as a snub from Canada and it has affected our trade relations with them. Harper has failed Canadians in any number of ways including his read of the economy as recently as november of last year.

david sawkiw[saskatchewan farmer]
Hmmmm, global recession, global warming,, seems harper is to blame for everything global.

Looks like we need a severe correction to the left to get back on track.

T Sanders
Most statistics aren't in until well after the quarter has ended. Harper wasn't lying, he can only talk about the information as it is known at the time. Remember, the Libs were looking at a Green Shaft and the NDP were looking at eliminating corporate taxes. Both strategies would have sunk Canada farther into the red. The PC's have done a good job, in spite of the global financial mess.

DC in AB
Marc Kingston hit the nail on the head... this whole recession across the world is nothing but confidence... I don't owe anymore money than I did two years ago, in fact, I owe less, and most people owe the same or less. Most companies owe the same or less. So, how do we go from having the strongest economies in history right across the G8/G20, etc to having very week times, one of the worst in nearly 80 years? CONFIDENCE. People, take your wife and kids out for dinner, go on vacation, buy a new car, maybe buy a new house (prices are down, and no, credit has NOT dried up in Canada). We must all work together to fix this, you can't sit back and let others fix it.

Job opportunity
Stay status quo, divert issues to blame and worry other economies. Very soon, more Canadian will be out of jobs!!

George Kielpinski
All this continous doom and gloom even stops those who have money to spend.Lets encourage those to keep on spending.I for one have not cut back.Stop buying lottery tickets and purchase worthwhile goods.

island girl
Since the States were responsible for this, why aren't they liable for the losses? More than their sub-primes, all these ponsie schemes are surfacing which has dragged down the whole world. Yet, the States will rebound before any other country and take advantage of that position...

CHAD
Its hard to believe the "experts" when they say everything well be ok by the start of 2010. If we are in the "R-word" why are things costing more or the same shouldn't things be cheaper.

Paul in Wpg
Well, I am not a conservative but I hardly think that Harper lied to us during last election. No world leader knew that things were going to get this bad. It is hard to blame the conservatives when the Liberals and NDP did not see this coming too. It is a global recession and no matter what government is in power we would be in the exact same situation that we are in now.

Being aggresive within our own economy can only do so much when oil and energy prices are down and when no one is buying our exports. What Conservative, Liberal or NDP government can solve that?

Dale
Glad we had the Conservatives and Harper at the helm. Harper has been responsibly warning Canadians some tough times were coming and we are now seeing these results.

Lets face it, this is a huge global reccesion that Canada has little control over, all we can do is try to make out the best for Canadians.

Lower taxs has helped us to this point and the stimulas will help, it can not stop some of the repercussions of the world.

If you can afford to spend go out and do it now, the economy needs it and deals are available.

Thanks again to this wise government, and to anybody who thinks they could isolate us from whats happening around the world... your ignorance simply shows your particianship.

Shirlee - SK
Some people repeatedly have such a hate for Harper. Yes the man has made mistakes and will no doubt make more. I think it is time for a change in leadership however, I would rather have the Cons. in power right now than the Liberals. The Liberals would have believed taxing us to death would be the solution. We all would be alot poorer. If things do not turn around useless programs should be cut.

QT1
This is as many economists said would happen. A quick nose dive followed by a bounce back. Wait for it and watch the markets they are an early indicator...

Gareth Hitchings
Marc, I'm an economist, so yes, I get economics. As an economist it was starkly obvious that Canada was headed for a recession along with the rest of the world last Summer and certainly by the fall. How does it inspire Confidence in me to hear my Prime Minister saying things I know to be untrue?

Your argument is that it's ok for Prime Minister to lie to people to make them feel more confident. That argument works so long as they're dumb enough to believe his lies. But for that other part of the population which can actually think, Harper's lies had the opposite effect on confidence - his lies drained my confidence to zero a long time ago.

This is not about hysterics, it's about competence. Harper neither told us the truth nor acted as if he even knew the truth himself. His November budget update was clearly so far removed from economic reality as to be considered for a Booker Prize (in fiction).

If we are doing twice as well as any other developed country then its only because of the sound footing the previous government left us on. Harper has had scarcely anything to do with it.

Mrs. Ogga
A run-of-the-mill recession lasts three or four years. This decline will last for ten years. I say that because I'm a self-proclaimed analyst. Why can't I be? I'm just as capable of guessing as the talking heads on BNN and MSNBC.
If "the experts disagree", then they're not experts.

Marc Kingston
Gareth Hitiching. Do you not get economics. One of the largest factors is confidence. The PM did the right thing by trying to reassure Canadians things were OK. Thats what a smart PM does, instead of screaming doom and gloom like the opposition parties and scaring Canadians. The fact remains we are doing way better than the rest of the world. Why can people like you give credit where credit is due. This government has lead us well. The facts don't lie. We are doing twice as better than any other developed country in the world!

Roger T
Harper where are you now? Whatever happened to your 2008 "Sounding" speech. Sounding more like a depression now and no where to be seen.

The Harper Gov't gave a False and hopeless speech to all Canadians about the economy and where it was heading while leading consumers to spend what they would have saved in afree fall market. The global meltdown has just begun and will continue til all the companies get bailout from the Gov't since they are handing out FREE money to corporations. More corporations will start posting news that their company is suffering from the free fall so that the FREE flow of money will funnel into their pockets. Why work for your money when you can get it for free from the Gov't handout! It's business as usual for corporate thieves.

Saving comes before the economy!

Dave
What difference if we are better than the rest of the world. Its bad and no real solution. How many jobs will the stimulus create?

Gareth Hitchings
I sure am glad we have a Prime Minister who as late as October - during the 4th Quarter - still didn't have the faintest idea that a recession was coming.

He either didn't know or he was straight up lying to us.

Harper's solution to the crisis? Anti-Ignatieff Attack Ads.

S in S
Do people still actually think thing are going to get better in the last quarter? Or even next year?? Anyone not preparing for whats to come will only have themselves to blame. The sooner people see that this is merely the beginning the better off they'll be.

Bernard Romanycia
Who trusts government statistics anymore? Bankers?

Charlie
Only glimmer of hope is it is better than all the rest of the world!