Canada falls into technical recession

Sept. 1, 2015 – Canada’s economy recoiled for the second-straight quarter of 2015 — knocking the country backwards into a technical definition of recession, as revealed by Statistics Canada data today.

The federal agency said real gross domestic product contracted at an annual pace of 0.5 per cent in the second quarter of the year, which followed a revised decline of 0.8 per cent during the first three months of 2015.

Statistics Canada says the first-quarter performance was weaker than originally estimated, forcing the agency to lower its GDP reading for the first three months of the year from an original estimate of 0.6 per cent.

On the positive side, there was evidence to suggest Canada’s economy began to bounce back in June as GDP grew by 0.5 per cent for the month after shrinking over five straight months.

That June increase was led by a 3.1-per-cent boost in natural resources extraction — the category’s first increase following seven consecutive months of decline.

The new batch of data is likely to add fuel to the heated, ongoing political debate over how best to respond to the weakened economy as parties battle for support ahead of the October 19 federal election.

It is also expected to intensify the economic argument over the severity of the technical recession — recently defined by the federal government as two consecutive quarters of negative GDP.

— With files from Andy Blatchford, The Canadian Press