“Oh Canada, my home and native land….”
This opening refrain of the Canadian national anthem is a melody which is indelibly etched in my mind as an earworm (defined as a catchy piece of music that continually repeats through a person’s mind, after it finishes playing). It’s a song I unconsciously memorized while watching live hockey games featuring my two favorite teams: the Toronto Maple Leafs and the Montreal Canadians.
My love for our northern neighbor began when I was in college. It all started with a road trip with some good friends back in 1983; a journey from Columbus, Ohio, up and across the Ohio Turnpike, around Buffalo, New York, and then across the U.S./Canadian border to the Queen Elizabeth Way. Our destination was Toronto, Ontario, Canada, a cosmopolitan and culturally diverse city that reminds me a great deal of Chicago. I’ve also visited Vancouver, a city in western Canada that is annually listed as one of the top places to live in the world.
So are you impressed by all of this? Well, don’t be. That is, unless you are Canadian.
Recession in Canada?
Canada is currently experiencing a fascinating time, an era that has become fodder for lively neighborhood conversations over Molson beers. Amid what some economists are calling a recession, questions are now being raised about the country’s long dependence on natural resources extraction as its economic underpinning. Boom towns are a relatively recent Canadian phenomenon, attracting miners and builders to build expensive pipelines and terminals. With this development, the country subsequently became what one might describe as a dig-and-deliver producer of pricey raw materials in a world flush with inexpensive commodities. “
Today, a sea change is taking place in Canada’s economic fortunes, against a backdrop of falling commodity prices. Iron ore, oil and coal – all staples of the mining and energy sectors upon which Canada has relied for years – are trading at less than half of the prices seen in 2011. As a result, a number of economic prognosticators now believe that these factors, along with a steep decline in spending on energy sector machinery and equipment, suggest that Canada is now in the throes of a recession.
This reliance on natural resources has served the nation well in the past, helping Canada avoid the global banking crisis associated with the financial crash of 2008. Contrarily, the country’s economy actually grew rapidly, fueled by the export of this vast supply of resources. So this recessionary moment is new territory for prideful Canadians, as they watch their currency plunge and economic momentum grind to a halt.
Resilient Job Market: Will it Save the Day?
I was recently talking to a cousin who is now a nurse at a Toronto hospital. She boasted that jobs are plentiful across many fields and industries, describing the Canadian scene as a virtual Land of Milk and Honey for employment opportunities.
It’s this notion that has some economic experts suggesting that the howling jackals presaging Canadian economic doom are overlooking one of the country’s eternal shining stars: the resilient nature of Canada’s job market and it’s robust consumerism. Reams of data from Statistics Canada, the country’s national statistical agency, seem to suggest that this may in fact be true; that the Canadian economy continues to add jobs at a fairly robust clip, with the vast majority of them being full-time positions. An estimated 180,000 jobs have been created since June 2014, when oil and other commodity prices began to slide. And just last month (August 2015), the Canadian economy gained 12,000 jobs; this is hardly indicative of a recession.
With respect to consumerism – another indicator light on the economic dashboard – Canadians continue to make big-ticket purchases like there is no tomorrow, snapping up homes and new cars in record numbers. By way of an example, Porsche sales are registering in at a healthy 30% increase over last year, nothing to sneeze about on a cold and foggy Canadian morning.
But is all of this a Fooler?
Despite indications that all is well on the Canadian economic front, many workers would likely say, “Not so fast, eh?” Along with the apparent job market gains came reports that the unemployment rate recently lurched higher for the first time in months, with growing numbers of Canadians looking for work. As of August 2015, unemployment stood at 7%.
Perhaps more alarming, an annual survey of employees performed by the Canadian Payroll Association indicated that more than one-third of workers feel hammered by growing levels of debt. 24% reported that they would be unable to come up with even CA$2,000 if an emergency arose; 36% indicated that they are overwhelmed by their current level of debt; and a whopping 48% remarked that it would be challenging to meet their financial obligations if their paycheck happened to be delayed by even one week!
Is this really an “Uh-Oh” Moment for Canada?
Frankly, it’s challenging to discern a clear picture here. But what I do know is that Canada is a prideful and resilient nation that always sees itself through tough times, and does so with grace. Conrad Black, author of a book I’m currently reading entitled ‘Rise To Greatness: The History of Canada From The Vikings To The Present‘ perhaps reflects this sentiment best when he says, “In Canada, we really have undersold ourselves, even to ourselves. That’s why I wrote this book.”
I couldn’t agree more.
Michael Scott is a journalist and blogger who focuses on the intersection between free markets and economic freedom. He can be reached on Twitter @biz_michael