Everyone knows that Canada is in a deep economic slump caused by measures taken to control the spread of the COVID-19 pandemic — but they'll have to wait until May 1 to find out if it's officially a recession.
Jeremy Kronick, associate director of research for the C.D. Howe Institute, says a special meeting of its Business Cycle Council was held Thursday to ponder the question because of the extraordinarily difficult economic conditions in Canada as much of its industry and workforce is idled.
Kronick says the group of eight senior economists voted on the subject but will hold off on an official communique until after economic growth numbers for February are released by Statistics Canada at the end of April.
The council, which normally meets once a year in December, is considered the official arbiter of when and if a Canadian recession is occurring or has occurred.
Kronick says the council defines a recession as a pronounced, persistent and pervasive decline in aggregate economic activity — it doesn't necessarily have to meet the classic definition of two consecutive quarters of negative economic growth.
He says defining when and if a recession has occurred is vital information for those who set future public policy and assess past public policy in Canada.
"Right now at this moment, every economist, I think, every policy maker, every person knows we're in a recession, right? Getting that isn't going to necessarily matter," Kronick said.
"But a lot of policy is based off economic growth, the impact it has on the economy, on jobs, and so understanding exactly when we were in and not in a recession, understanding GDP growth and labour growth over time, will let you pinpoint the effectiveness of policies better."
This story by The Canadian Press was first published April 16, 2020.
The Canadian Press