Is Canada headed for a recession? Here're the details
Canada is facing a possible recession because of global trade issues. Traditional signs like GDP growth and job losses are worrying. Unemployment has increased, and forecasts predict slow growth. Consumer confidence is mixed, with some fearing a downturn. Unusual economic indicators are also being watched. The future is uncertain due to tariffs and other economic problems.
Tired of too many ads?
Remove Ads
Traditional Indicators Point to Trouble
Deloitte warns of a looming downturn, citing weak GDP growth and falling investment.
Oxford Economics projects just 0.7% growth in 2025, followed by a 0.2% contraction in 2026, driven by global trade shocks and reduced immigration.
RBC anticipates continued slowing of growth into 2026.
Tired of too many ads?
Remove Ads
Consumer Confidence: A Mixed Signal
Reading the Quirky Economic Tea Leaves
The 'lipstick effect': People splurge on small luxuries during tough times.
Greenspan's 'men's underwear index': Underwear sales dip during recessions, as it's one of the easiest purchases to delay.
The 'cardboard box recession': A drop in demand for cardboard boxes, according to Charles Schwab's Jeffrey Kleintop, may indicate a slowdown in manufacturing.
The 'Skyscraper Index': Economist Andrew Lawrence notes that the construction of record-breaking skyscrapers often precedes economic downturns.
Uncertainty Reigns
As global trade tensions escalate, Canada finds itself on the brink of a potential recession, with both traditional and unconventional indicators flashing warning signs.The C.D. Howe Institute defines a recession as a "pronounced, persistent, and pervasive decline in aggregate economic activity," typically marked by two consecutive quarters of declining GDP. Current forecasts suggest storm clouds may be gathering:Meanwhile, Canada's job market is under strain. As of April 2025, the unemployment rate rose to 6.9% — the highest since November 2023 — leaving more than 1.6 million Canadians out of work. That month, the economy lost 30,000 jobs, while adding just 7,400 new ones.The Bank of Canada, in its recent Financial Stability Report, outlined scenarios in which prolonged U.S. tariffs could trigger a year-long recession, with GDP declining for four consecutive quarters.Consumer sentiment is sending more ambiguous signals. The Bloomberg-Nanos Canadian Confidence Index rebounded to 48.6 as of May 9, approaching the neutral 50-point threshold. Data scientist Nik Nanos attributes the boost to the election of Prime Minister Mark Carney.But some economists warn the rebound may not last. Walid Hejazi, professor at the University of Toronto, notes that fear alone can drive downturns. 'If consumers fear a recession is coming,' he says, 'they may reduce their spending, and reduced consumer spending makes the economy slow down even more.'Beyond the traditional data, economists are watching more unusual trends:The road ahead is anything but clear. Isabelle Salle, a behavioral macroeconomics professor at the University of Ottawa , says we're navigating uncharted waters.'Tariffs and this uncertainty shock just added to existing problems, at the worst time possible,' she explains. 'With uncertainty, you cannot easily assign probabilities to the different scenarios. You really have to operate with just options.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
7 hours ago
- Mint
Commercial Real Estate Distress Is Spreading: Credit Weekly
(Bloomberg) -- The pain in US commercial real estate credit continues to bubble to the surface after a surge in borrowing costs and the rise of work from home left lenders vulnerable to losses. Delinquencies continue to increase, though the rate has moderated, researcher Green Street said this past week. Distress is also climbing, rising 23% to more than $116 billion at the end of March from a year earlier, data compiled by MSCI Real Capital Analytics show. That's the highest in more than a decade. Investors including Victor Khosla of Strategic Value Partners LLC have warned that debt maturities will lead to a 'tsunami' of problems for US offices in particular. There are signs that's spreading. The past-due and nonaccrual rate for commercial real estate portfolios reached the highest since 2014 earlier this year, the Federal Deposit Insurance Corp. wrote in a report last month, citing multifamily as an increasing source of pain. Past-due and nonaccrual loans are so far past due that banks have stopped booking interest owed because they doubt they'll ever receive it. Policy uncertainty, meanwhile, is also holding back activity in the underlying market as businesses delay decisions across districts, the Federal Reserve noted in its May Beige Book survey. For example, some of the reserve banks stated that demand for warehouses was affected by the potential impact of tariffs. Click here to listen to a podcast on the dangers facing private debt funds when the cycle turns The proposed Section 899 'revenge tax' in President Donald Trump's tax-and-spending bill could also 'trigger wider foreign investor pullbacks, impacting all US real estate lenders,' said Harsh Hemnani, a senior analyst at Green Street. German commercial property lender Deutsche Pfandbriefbank AG announced this past week that it's quitting the US market and will wind down, securitize or sell its €4.1 billion ($4.7 billion) portfolio there, warning it could make a loss this year due to the expected cost of the decision. Still, 'the timing of the exit likely indicates a belief that current market conditions offer a favorable window for divestment' amid improved liquidity and competition in the debt market, Hemnani said. That's in part because direct lenders have been raising more capital to invest in CRE, a trend that's causing some wariness. On Thursday, the Financial Stability Board cautioned that shadow lending to the industry globally 'may amplify and transmit shocks to banks.' Some traditional lenders continue to kick the can down the road in the US rather than take impairments. The wall of CRE debt continues to rise, in part because some credit providers have extended the duration of loans, the Mortgage Bankers Association said on Tuesday. Another headwind for traditional lenders is large unrealized losses on securities portfolios that they're holding to maturity or seeking to offload, with the FDIC saying last month that the losses stand at more than $410 billion. CRE is likely to be a similar source of pain. Loss rates on commercial and residential mortgage-backed securities suggest the unrealized losses on banks' mortgage books are likely to be as large or larger than in securities, academics including Lawrence White of New York University's Stern School of Business wrote last week. --With assistance from John Gittelsohn and Patrick Clark. More stories like this are available on
India.com
9 hours ago
- India.com
Bad news for employees of this company as it plans to sack over 1000 employees, not Narayana Murthy's Infosys, TCS, Google, IBM
(Representational image: freepik) New Delhi: American multinational corporation and IT giant Microsoft Corporation will cut more than 1000 jobs as the conglomerate is rearranging its staff to support its ambitious Artificial Intelligence initiatives. This will be Microsoft's third significant layoff wave of 2025. Most of the jobs that will be eliminated in early July will be from the sales department. Microsoft's new fiscal year This particular time of early July coincides with the beginning of the company's new fiscal year, according to Bloomberg and the Times of India. As mentioned above, Microsoft is reshuffling its staff to support its ambitious Artificial Intelligence initiatives for which it is doubling down on efficiency and strategic realignment as AI investments mount up. Sales Division in third round of layoffs This third round of layoffs is considerably more focused on customer-facing positions than the earlier two rounds, which were mainly focused on engineers and developers. The most affected would be the employees in Sales and Marketing department which accounts for about 45,000 of Microsoft's 228,000 workers. In the first two rounds of layoffs, Microsoft fired around 2,300 employees in Washington this year. Earlier in 2023, the company had fired 3,200 people, which was the biggest layoffs round. Reportedly, Microsoft had dropped a hint about this move in June 2024 as it relieved 1,000 mixed-reality and Azure roles. Apart from that, the company started selling software to outside companies in April as it concentrated on small and mid-sized business sectors. Experts say that apart from the sales positions, other departments might also be impacted. In May, the company had laid off more than 6,000 people in a 3% cut of its workforce. Out of which 1,985 employees affected were from Washington. Investments in realm of Artificial Intelligence In the proverbial 'keeping up with the times' and adapting to current trends, Microsoft is now emphasising more on AI as it tries to stay ahead in a fast-changing technology landscape. The tech giant is investing heavily into data centres and AI research to support growing demand from businesses that are adopting AI tools and services. The Bloomberg report further said that Microsoft has planned capital expenditure of around Rs 6.6 lakh crore ($80 billion) for the ongoing financial year. A big chunk of this expenditure will go into expanding data centre infrastructure as the aim is to reduce pressure on existing facilities that support AI services. Layoffs in the tech sector are continuously troubling IT professionals. Recently, Amazon CEO Andy Jassy has warned that the integration of Artificial Intelligence (AI) within the corporate workforce will eventually lead to job cuts. After the COVID-19 pandemic, big tech companies like Amazon, Meta and Google laid off thousands of workers to reduce their staff. Now, another tech giant, Microsoft, has given a live, sombre, and somewhat gloomy presentation.
Hindustan Times
14 hours ago
- Hindustan Times
Tesla set to debut in India with showrooms in Mumbai and Delhi: All you need to know about location and rent
Elon Musk's Tesla Inc. is reportedly gearing up to launch its first showrooms in India by July, marking the electric vehicle (EV) giant's formal entry into the world's third-largest automobile market. Tesla is reportedly set to open its first India showrooms this July. Here's what we know about their location and rent. (Representational photo) REUTERS/Charles Platiau/File Photo(REUTERS) Bloomberg quoted sources familiar with the matter as saying that Tesla's first batch of vehicles, Model Y rear-wheel drive SUVs, has already arrived in India. These units were shipped from the company's manufacturing facility in China. The Model Y is currently the world's best-selling electric car. The first showroom is expected to open in Mumbai by mid-July, followed by another in New Delhi, Bloomberg reported. Here's what we know about Tesla's upcoming showrooms in Mumbai and Delhi Tesla in Mumbai: Most expensive auto showroom deal in the country by far Tesla, has taken 4,000 sq ft of showroom space in India's costliest commercial district, Bandra Kurla Complex (BKC), in Mumbai, for ₹ 23.38 crore for five years, according to property registration documents accessed by CRE Matrix. The space has been taken on rent by Tesla along with two car parking spaces, and the per sq ft rent works out to be ₹ 881, the documents showed. The amount sets a national record in terms of lease rentals and makes it the most expensive auto showroom lease deal in the country by far, experts said. The documents show that the showroom space has been rented out in a commercial building named Maker Maxity on North Avenue. had reported on March 1 that the company had finalised showroom space in Mumbai's Maker Maxity in BKC, Mumbai, at a monthly rent of around ₹ 35 crore. The registration documents show that the transaction was registered on February 27, 2025, between Univco Properties LLP, the property owner, and Tesla India Motor and Energy Pvt Ltd. Documents show that the lease's tenure started on February 16, 2025, and the rent-free period is from February 16 to March 31. The rental for the lease deal is payable from April 2025 up to February 2030. The security deposit for the transaction is ₹ 2.11 crore, and the rental agreement has a 5% per month rent escalation clause on a per annum basis. According to the documents, the per month rent is ₹ 35.26 lakh, followed by ₹ 37.02 lakh in the second year, ₹ 38.88 lakh in the third year, ₹ 40.82 lakh in the fourth year, and ₹ 42.86 lakh in the fifth year. BKC is Mumbai's central business district (CBD) and a key hub for the Banking and Financial Services Industry (BFSI) and Fortune 500 companies. Tesla picks up managed office space in Mumbai Tesla has also secured 30 seats in a managed office space near Mumbai's Bandra Kurla Complex, the most expensive business district in India. According to sources, the space has a monthly rent of ₹ 3 lakh. The US-based EV firm has leased 30 seats in a co-working office located in Phoenix Market City with a rent of ₹ 3 lakh per month. The lease agreement is for a period of one year and comes with a three-month lock-in period, they said. This is a short-term lease that was executed between EFC and Tesla India Motor & Energy, sources said. They said that in its initial stages of establishment, Tesla has opted for the flexible workspace option to support its evolving needs. Tesla's dedicated vehicle service centre facility in Mumbai Elon Musk's Tesla India Motor and Energy Pvt Ltd has leased 24,565 sq ft of warehouse space at Lodha Logistics Park in Mumbai's Kurla area for a total rent of ₹ 24.38 crore for five years, according to property registration documents accessed by CRE Matrix. The new commercial space is in Kurla West, central Mumbai. The newly acquired 24,500 sq. ft facility, located in Macrotech Developers' Lodha Industrial and Logistics Park, will serve as a dedicated vehicle service centre, Tesla's first such facility in the country. The documents showed that the leased space includes two ground-floor units with a combined carpet area of over 18,000 sq ft and a chargeable area exceeding 24,000 sq ft. The starting monthly rent is over ₹ 37.53 lakh for the first year, with a 5% annual escalation, bringing the total rent over the five-year lease period to more than ₹ 24 crore. According to the documents, Tesla will pay ₹ 1.62 crore in common area maintenance charges over five years and has provided a security deposit of ₹ 2.25 crore. The lease agreement was registered on May 16, 2025. The license period begins on April 20, 2025, while the chargeable license period starts on June 1, 2025. Sources told that the per sq ft rent for this deal is around ₹ 218. This is also the first Grade A city warehousing facility suitable for automobile companies, quick commerce companies, and cloud kitchens. Also Read: Tesla leases 24,565 sq ft warehouse space in Mumbai's Kurla for over ₹ 24 crore for five years Elon Musk-owned Tesla is reportedly not keen on setting up manufacturing and production units in India. According to a statement from Union Minister for Heavy Industries HD Kumaraswamy, Tesla is only interested in expanding its showrooms in India. Tesla's Delhi showroom space update Sources said that the Delhi showroom space finalised by Tesla is around 4000 sq ft, and the rent is around ₹ 25 lakh per month. Sources said that Tesla has finalised the lease of showroom space in the Aerocity area located in a Brookfield property near New Delhi's Indira Gandhi International Airport (IGI). In April 2023, Bharti Enterprises Limited (BEL) transferred its 51% stake (held in Rostrum Realty) to Brookfield Group. In June 2024, Bharti Enterprises Limited (BEL) transferred its remaining stake (held in Rostrum Realty) to Brookfield India Real Estate Trust (sponsored by the Brookfield Group). Tesla could not be reached for a comment.
