The warning signs were there.
No one wanted to see them:
Recession fears have been front and centre to start the year, but a new report from the Angus Reid Institute is shedding light on just how widespread those worries are.
The study, released Feb. 1, found that half of all Canadians under the age of 55 are afraid they could lose their jobs in the event of an economic downturn.
The last time fear of job loss was this high was during the beginning of the second year of the pandemic.
“The fear of job loss has stuck with Canadians in recent years, despite the historic low in unemployment that followed the lifting of COVID-19 restrictions,” the study said.
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The Bank of Canada “may still need to raise rates,” Governor Tiff Macklem yesterday told the Commons finance committee. The Bank’s next rate announcement is March 6: “When can we cut them?”
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Canadian Finance Minister Chrystia Freeland said that roughly a fifth of the 900,000 small businesses that took out interest-free loans to survive the government’s civil rights abuses during the Wuhan coronavirus pandemic have not repaid the loans yet.
The Canadian Federation of Independent Businesses (CFIB) painted an even grimmer picture, estimating that 25 percent of borrowers have missed the January deadline.
Bankruptcies in Canada began surging as pandemic funding dried up in 2023, so the possibility that more than 200,000 small businesses might not repay their emergency loans is a bad omen for 2024.
CFIB and the Canadian Finance Ministry assured Reuters on Thursday that massive small business collapse was not in the cards, even for the companies that missed their pandemic loan repayment deadline. The optimistic view holds that those borrowers will sign up for long-term repayment programs that will charge them five percent interest over the next two years, but there are signs the slumping Canadian economy might finish off some tottering business models:
“We do anticipate … a rise in insolvencies over the next six months or so,” Stephen Tapp, chief economist at the Chamber of Commerce, said in an interview.
The Conference Board of Canada (CBC), an independent think tank, forecasts that consumer spending in 2024 on a per capita basis is expected to slump further from what was already seen last year.
CBC estimates first quarter corporate profits to nearly half to C$104.5 billion from a year ago, and the rest of the year will also be weaker than 2023 with companies hit by higher costs and drop in sales.
BNN Bloomberg warned in mid-January that many troubled Canadian small businesses would throw in the towel instead of piling up interest on balances they could not pay before the January 18 deadline for settling pandemic emergency loans. The deadline has already been pushed back several times because business groups said it was too difficult to meet.
Not only do the late payers have to pay five percent interest on the extended repayment plan, but they also lost $20,000 in loan forgiveness offered by the government for prompt repayment of their Canada Emergency Business Account (CEBA) loans.
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BREAKING!!!
— Andrew Scheer (@AndrewScheer) February 2, 2024
Bank of Canada confirms it’s LOSING MONEY!
Thanks to Trudeau forcing the bank to buy his bonds, and the massive interest rate hikes, the Bank is losing $6 billion!!!
Taxpayers are on the hook for these massive losses. pic.twitter.com/mROYZeDLbT
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In addition, 82 per cent of respondents nationwide said they believe Canada is in a recession. Pollara says this is the third-highest total since polling on this question began in 2001.
While Canada has not yet seen two negative quarters of GDP growth, which has been a working definition for a technical recession often used in the media, some economists say
Canada is already in a recession on a per capita basis, given that immigration has driven much of Canada's positive economic growth.
This immigration:
The Department of Immigration issued study permits to 982,880 foreign students last year, new records show. The department for the first time listed Canadian universities and colleges with the highest number of foreign students ahead of looming cuts to permits: “There are clearly some institutions that shouldn’t exist.”
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More than 15 per cent of immigrants decide to leave Canada either to return to their homeland or immigrate to another country within 20 years after admission as permanent residents, according to a new study.
Statistics Canada examined the emigration of immigrants from 1982 to 2017 in the study released Friday.
The study also found that 5.1 per cent of immigrants admitted between 1982 and 2017 emigrated within five years of their admission.
"While some immigrants may have planned to leave Canada at some point, emigration may also attest to the difficulties many immigrants encounter in integrating into the Canadian labour market or society," according to the study.
Rather, there are no jobs.
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Despite the urgency of doing so, the study says, “since the pandemic the federal government has postponed reducing its deficit because it has continually revised program spending upward.”
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A 33 percent increase in mandatory security fees will cost air passengers millions more than originally estimated, says an Access To Information memo. The finance department claims the Air Travelers Security Charge merely recovers costs though data show it generates a profit for the federal treasury: “I wish I could say these increases in fees would lead to better service.”
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