Canada’s economy has officially fallen into recession as real gross domestic product (GDP) declined 0.1% in the second quarter, following a 0.2% decrease in the first quarter, Statistics Canada reported a short while ago.
While real GDP by industry rose 0.5% in June, business investment in non-residential structures decreased 2.3% in the second quarter, the third consecutive quarterly decline, as lower investment in both non-residential buildings (-1.8%) and engineering structures (-2.4%) contributed to the decline.
Investment in machinery and equipment by businesses fell 4.6% in the second quarter, with lower investment in industrial machinery and equipment (-11.6%), communications and audio and video equipment (-4.7%) and furniture, fixtures and prefabricated structures (-3.0%) contributing to the decline.
Investment in intellectual property products faced a similar fate, declining 4.6% in the second quarter, following a 5.0% decrease in the first quarter.
The most dramatic decline came in business outlays in mineral exploration and evaluation, falling 33.2% in the second quarter, after decreasing 19.6% in the first quarter.
The Conservatives on the campaign trail have refused to admit that Canada is in a recession, with Defence Minister Jason Kenney saying that the term recession needs to be redefined to mean “a widespread downturn in the economy,” and described the current state of the economy as a “discrete sectorial downturn.”
Prime Minister Stephen Harper also skirted the issue by saying “It’s more important to describe the realities of the situation, rather than have labels.”
“By a law his government introduced the definition is clear” NDP Finance Critic Nathan Cullen said. “If Canada has two quarters of negative growth, it’s a recession.”
Cullen was referring to the The Federal Balanced Budget Act, which defines “recession” to mean “a period of at least two consecutive quarters of negative growth in real gross domestic product for Canada, as reported by Statistics Canada under the Statistics Act.”
The Internet was not any kinder to Harper.
“More Conservative lies and spin, especially odorous is that it’s his own legislation!!” Robert Barwise of Prince George, BC commented. “Guess who will not be renewing his Conservative membership? This guy!!”
“Why not have STATSCAN send Ray Novak an e-mail tomorrow with the requisite economic data, so Harper can later claim that no one in the PMO read it?” Gordon Edmund Whitehead of Vancouver, BC commented. “That way, there’s no need to play around with messy or confusing definitions of a ‘recession.’”
Stephen Harper vowed to “stay the course” on the economic front in his first speech after the writs were dropped.
[Photo Credit: Kevin Harber/Flickr]
