By The Canadian Press
The C.D. Howe Institute’s Business Cycle Council says Canada has entered a recession due to the economic devastation caused by the COVID-19 pandemic.
In a report released Friday, the council said the economy peaked in February before the steps taken to slow the spread of the coronavirus brought the economy to a standstill.
A commonly used definition for a recession is two consecutive quarters of negative quarter-over-quarter economic growth.
However, the C.D. Howe council defines a recession as a pronounced, persistent, and pervasive decline in aggregate economic activity and it looks at both GDP and employment as its main measures.
“Members agreed that by applying the council’s methodology to the preliminary data available, Canada entered a recession in the first quarter of 2020,” the council said in statement.
The March jobs report showed more than a million jobs were lost in the month, while a preliminary estimate by Statistics Canada suggests the economy contracted by nine per cent in the same month.
“The council agreed the magnitude of the contraction makes it extremely unlikely that any future adjustments will overturn the conclusion of a major drop in economic activity in the first quarter,” the council said.
Statistics Canada reported Thursday that economic growth had stalled going into the crisis, with real gross domestic product essentially unchanged in February due to teacher strikes in Ontario and rail blockades across many parts of the country.
The official estimates of GDP for March and the first quarter of 2020 will be released on May 29.