Things have not been this bad for the Canadian economy since the last global recession. During the second quarter of 2016, Canada's GDP contracted at a 1.6% annualized rate. That was the worst number in seven years, and it was even worse than most analysts were projecting.
This comes at a time when bad news is pouring in from all corners of the global economy. Canada in particular has been hit very hard by the collapse in oil prices, and the massive wildfire in northern Alberta back in May certainly did not help things, Charisma News reported.
The recent drop in GDP was larger than analysts had projected, but not far off the predicted 1.5% loss.
"The figure could have been worse, given the hit from the wildfire, and clearly confirms the disappointing downward trend in exports over the last few months," said Sal Guatieri, senior economist at BMO Capital Markets, according to a BBC report.
In May, wildfires devastated the parts of northern Alberta where much of Canada's oil and natural gas is produced.
For many years, high oil prices and booming exports enabled the Canadian economy to significantly outperform the US economy. But now conditions have changed dramatically, and all of the economic bubbles up in Canada are starting to burst.
This includes the housing bubble, as home sales in the hottest markets such as Vancouver drop through the floor late in the summer. In fact, it is being reported that home sales during the first two weeks of August in British Columbia were down a whopping 51% on a year over year basis.
If the price of oil does not rebound in a major way, the Canadian economy is going to continue to deeply struggle.
Global Downturn
There are so many signs that indicate that the global economy has entered a new major downturn. The world is more interconnected than ever before, and just as was in 2008, big trouble on one side of the globe quickly affects the other side.
Today the seventh largest container shipping company in the entire world has completely imploded. Total global trade has been declining for quite some time now, and it was inevitable that this sort of thing would start happening.
The largest casualty finally emerged on Wednesday when South Korea's Hanjin Shipping, the country's largest shipping firm and the world's seventh-biggest container carrier, filed for court receivership after losing the support of its banks, leaving its assets frozen as ports from China to Spain denied access to its vessels.
Over in Europe, an emerging banking crisis continues to simmer just under the surface.
European banks have had a very tough six months as the shock and volatility around Brexit sent banking stocks south. Major European banks like Deutsche Bank and Credit Suisse saw their shares in free-fall after the referendum's results were announced. In the UK, RBS was the worst-hit, with its shares plunging by more than 30% since June 24.
Depression, Anxiety
Lost productivity caused by workers' depression and anxiety costs the Canadian economy almost $50 billion a year, according to a new report released Thursday.
The Conference Board of Canada said in the report that depression costs the economy at least $32.3 billion annually, while anxiety costs another $17.3 billion a year.
Worker productivity is lost through both absenteeism—when employees are away from their jobs—and presenteeism—when they go to work, while sick will perform with reduced productivity, the group says.
Louis Theriault, vice-president of public policy at the Conference Board, said a large proportion of working Canadians have unmet mental health needs that prevent from performing at their peak.
The prevalence of depression varies enormously by industry, with the accommodation, food services and retail trade sectors topping the list, Theriault said.
The report should serve as a wake-up call that employers need to act more strategically about the issue of mental health, he said.
