With a drop in commodity prices and ongoing market volatility in Europe, Canada's economy is vulnerable to "external factors," Finance Minister Joe Oliver says.

"We are in a fragile economic environment… and we are getting repeated evidence of that," Oliver told reporters at the Australia-Canada Economic Leadership Forum in Vancouver.

He noted that the drop in the price of crude oil has hurt Canada's economy, while the crisis enveloping Greece is causing volatility in the markets. Growth in both the U.S. and Europe are sluggish, while China and Japan's economies are also slow, he said.

But once again, the minister would not say that Canada is already in a recession, saying only that "the numbers (for the second quarter) are not out yet."

He added that this is "a critical time" for the Canadian economy to "stay the course to remain fiscally responsible."

Oliver's address came as the latest numbers from Statistics Canada reveal that Canada's trade deficit grew in May and that our trade balance is now on pace for a record deficit in the second quarter.

BMO senior economist Benjamin Reitzes says the latest numbers increase the chances that the Bank of Canada will cut its key interest rate when it meets next week.

Reitzes also joins the chorus of economists who are predicting the economy will slow again this quarter, sending Canada into a technical recession.

On Monday, TD Bank cuts its economic outlook for Canada, with senior TD Economics economist Randall Bartlett saying forecasters have underestimated the impact of the drop in oil prices. Like many other economists, Bartlett said he expects the Bank of Canada will cut its key lending rate next week.

Meanwhile, the Bank of Canada said Monday there is a divide in business confidence across the country, because low oil prices are weighing on some regions more than others.

The central bank's latest business outlook survey suggests businesses on the Prairies expect sales to slow over the next 12 months as the oil price shock spreads across other sectors. However, "domestic demand is strengthening in regions that are less exposed to the energy sector," the report said.

Ian Lee with Carleton University's Sprott School of Business says, while Canada's economy might technically slip into a recession – which is defined as two quarters of negative growth – he's seen enough recessions in his time to say this doesn't feel like a real one.

"I do not believe we are in a recession. It doesn't feel like a recession, it doesn't look like a recession," he told CTV News Channel Tuesday.

He agrees with the Bank of Canada's business outlook that while the oil and gas economy is in a recession, the rest of Canada -- where the majority of Canadians work – is not being affected.

"The oil and gas sector is not the totality of Canada. It's three to five per cent of our GDP and it's about one-third of our exports," Lee said.

In the service sector, which makes up the majority of the Canadian economy, there are no mass job cuts underway.

"If we really were in a recession, you'd be witnessing systematic layoffs across the country in all sectors," Lee said.

With files from The Canadian Press