Canadas great recession wasnt that bad after all: Statistics Canada

The Canadian Press ~ The News
Published on April 15, 2010

Ottawa -

In most of the world it's still known as The Great Recession, but in Canada it may go down as The Great Escape.
While the rest of the world reeled from an economic and financial tsunami that threatened to spiral into the worst disaster since the 1930s, good policies and good planning appear to have sheltered Canada from the worst.
Statistics Canada's official report on the 2008-2009 slump shows it was a most ordinary recession in Canada, in fact, even milder than the two previous economic dips.
Exports fell, more than 400,000 jobs were lost and company profits plunged, but it could have been so much worse, the agency concludes.
"The 2008-2009 recession was rapid and closely synchronized around the world," wrote Statistics Canada's head economic analyst, Philip Cross.
"(But) Canada, in contrast, experienced a recession that was less severe and shorter than in the other G7 nations," Cross said.
According to the federal agency, Canada did suffer through a technical recession - a 3.3 per cent drop in gross domestic product over three quarters between the fall of 2008 and the summer of 2009.
But that was shorter and milder than the six-quarter slump of 1981-82 in which GDP fell 4.9 per cent, or the four-quarter 1991-92 downturn, which resulted in a 3.4 per cent fall-off.
Recessions are mostly felt by those who lose their jobs, and on this measure the latest downturn was especially mild.
Statistics Canada said employment declined just 1.8 per cent in the recent recession, compared with 3.2 per cent in 1991-92 and five per cent in 1981-82.
Canada looks even better when compared with the United States. There, total GDP dropped 3.7 per cent, but employment tumbled six per cent over two years as 8.5 million people were thrown out of work.
Although the report does not touch the subject, Canada appears to be bouncing back stronger than any country in the G7 - which includes the U.S., the U.K., France, Germany, Italy and Japan.
Output rebounded by five per cent in the fourth quarter of 2009 and is forecast to have experienced an even bigger bounce at the beginning of this year. Meanwhile, the economy has added about 180,000 jobs since July.
The federal agency said Canada was able to withstand the storm better because it entered the slump in better shape.
"Corporations had used years of record financial surpluses to reduce debt-to-equity rations to an all-time low," wrote Cross.
"Large government and trade surpluses over the previous decade had significantly lowered both government and external debt and raised Canada's national saving rate."
And although the personal savings rate of Canadians was similar to that of American households, the national rate - thanks to government and corporate balance sheets - was three times higher than in the U.S..
The difference, along with sounder financial markets, helped Canada's domestic economy remain relatively strong during the recession.
Canada's was really an export recession, said the agency, noting that export earnings fell a massive 22 per cent in 2009, and corporate profits plunged 33 per cent.