Howe Institute Business Cycle Council Declares Recession Avoided in 2022, 2023 Weakness in Canadian GDP since the Bank of Canada began raising its policy rate in March 2022 has spurred much talk of the possibility of a recession.1 At a meeting in early 2024, the Council weighed the evidence of a recession having occurred in the past two years and whether current conditions could presage one. [...] This Communiqué comments on the last two years of data, including the current state of Canada’s economy, and whether the BCC’s definition of a recession has been met at any point over this timeframe. [...] 1 In December 2022, all six of the major Canadian chartered banks were predicting at least one quarter of negative growth (decline) in GDP in 2023. [...] 2 In particular, two quarters of negative GDP growth are neither necessary nor sufficient for the BCC to label a downturn a recession, despite the misconception that this constitutes the “official” definition of a recession. [...] Monthly GDP by industry fell in January, April, October and December 2022, and again in April, June, July, September, and December 2023.3 But, except for January 2022 and July 2023, employment rose in each of those months.4 Quarterly GDP by expenditure decreased in the last quarter of 2022 and in the third quarter of last year.
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