Why drivers in Eastern Canada could see big gas price spikes, and other Canadians won't
Drivers in Eastern Canada face a big increase in gas prices because of various factors, especially the higher cost of the summer blend, industry analysts say.
Canada is headed for a recession in early 2023, according to one economist.
"I don't think that we're in a recession just yet, but I do think that one is on the horizon," David Doyle, the head of economics at Macquarie Group, told BNN Bloomberg. "Our baseline is that Canada will enter a recession in the first quarter of 2023."
Macquarie Group, an Australia-based global financial services provider, estimates Canada will face an approximately three per cent contraction in gross domestic product (GDP) and a five per cent rise in its unemployment rate during the predicted recession.
"We actually think it will be pretty severe in Canada," Doyle said. "I think the die has been cast on this front. Because inflation has become so elevated, and unemployment was allowed to fall so low, I think a recession is almost inevitable at this point."
According to new data from Statistics Canada, the Canadian economy grew by a modest 0.1 per cent in July. Their estimates, however, show economic growth stagnating in August, when the annual inflation rate reached 7.0 per cent, down from a high of 8.1 per cent in June.
"I think what you're seeing is that the economy is stalling after having that significant boost from reopening earlier this year," Doyle explained. "I think it's appropriate to think that there's further slowing ahead, even after what looks to have been a very soft third quarter."
Canada's cooling housing market will play a significant role in that slowing, Doyle added. The latest Statistics Canada figures show output from real estate agents and brokers dropping 3.4 per cent in July, down for the fifth consecutive month. Doyle expects the trend to continue.
"Typically, you see housing start to weaken as you head into a recession," Doyle said. "We're certainly seeing ample signs of that."
Aimed at fighting inflation, the Bank of Canada raised interest rates to 3.25 per cent on Sept. 7, which has contributed to the cooling housing market. The increase followed a full percentage point hike in July, which was the largest single rate increase in Canada since August 1998. The Bank of Canada began hiking interest rates in March, after they fell to 0.25 per cent during the COVID-19 pandemic.
Economists widely predict the next interest rate hike will come on Oct. 26. Doyle thinks it could be the last.
"But it will likely be potentially six, nine, 12 months before we start to see the Bank cutting rates again," Doyle said. "That's because they'll want to be certain that they brought inflation under control."
Doyle believes there is a silver lining to the predicted recession.
"Often when you see a recession, it proves to be enough to bring inflation back down," he said.
With files from BNN Bloomberg
Drivers in Eastern Canada face a big increase in gas prices because of various factors, especially the higher cost of the summer blend, industry analysts say.
The journey to home ownership can be exciting, but personal finance columnist Christopher Liew warns about the trappings of becoming 'house poor' -- where an overwhelming portion of your income is devoured by housing costs. Liew offers some practical strategies to maintain better financial health while owning a home.
As the United States sets its first national limits on toxic forever chemicals in drinking water, researchers say Canada is lagging when it comes to regulations.
A Winnipeg woman was sentenced to house arrest after a single date with a man she met online culminated in her harassing him for years, and spurred false allegations which resulted in the innocent man being arrested three times.
It took years for Vinnie Deluca to collect more than 400 cards worth of free McDonald's McCafe coffee, a collection that now has "zero value" after the company discontinued the program.
U.S. President Joe Biden will accept endorsements from at least 15 members of the Kennedy political family during a campaign stop in Philadelphia on Thursday as he aims to undermine Donald Trump and marginalize the candidacy of Robert F. Kennedy Jr.
Almost 7,000 bars of pure gold were stolen from Pearson International Airport exactly one year ago during an elaborate heist, but so far only a tiny fraction of that stolen loot has been found.
New archeological investigations in Guatemala reveal that the ancient Maya people had a ritual of burning royal human remains as a public display of political regime change.
Mullett Arena buzzed like few times in the two years since the Arizona Coyotes moved in, the fans amped for one last desert hurrah.
When Les Robertson was walking home from the gym in North Vancouver's Lower Lonsdale neighbourhood three weeks ago, he did a double take. Standing near a burrow it had dug in a vacant lot near East 1st Street and St. Georges Avenue was a yellow-bellied marmot.
A moulting seal who was relocated after drawing daily crowds of onlookers in Greater Victoria has made a surprise return, after what officials described as an 'astonishing' six-day journey.
Just steps from Parliament Hill is a barber shop that for the last 100 years has catered to everyone from prime ministers to tourists.
A high score on a Foo Fighters pinball machine has Edmonton player Dave Formenti on a high.
A compound used to treat sour gas that's been linked to fertility issues in cattle has been found throughout groundwater in the Prairies, according to a new study.
While many people choose to keep their medical appointments private, four longtime friends decided to undergo vasectomies as a group in B.C.'s Lower Mainland.
A popular highway in Alberta's Banff National Park now has a 'no stopping zone' to help protect two bears.
B.C. resident Robert Conrad spent thousands of hours on Crown land developing an unusual bond with deer.
A Sudbury woman said her husband was bringing the recycling out to the curb Wednesday night when he had to make a 'mad dash' inside after seeing a bear.