Here's what a global recession might mean for Saskatchewan
Talks of a global recession in 2023 remain relatively strong as the calendar reaches the second month of the year.
University of Regina associate professor of economics Dr. Jason Childs agreed that a global recession is quite likely given current circumstances.
“I think its variable by region of course but I think it is still quite likely,” Childs said.
According to Childs, many signs continue to point to an economic slowdown across the globe because businesses that he feels would have squandered in normal times may start to fail now that pandemic supports are gone.
“Businesses that would have failed in normal times survived because they were propped up during the pandemic and now those various supports are gone and we’re going to see probably a rash of failures [all at once] that would have been spread over two or three years,” he said.
While Saskatchewan isn’t recession-proof, it is a province that can be resilient to tough economic times for various reasons.
According to Childs, in 2008, Saskatchewan was able to virtually dodge a global recession in some aspects.
“Essentially what happened then was commodity prices stayed high because you had this building room where governments, including Canada’s, decided to spend really aggressively on things like infrastructure and other commodities,” Childs said.
A pumpjack works at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. (THE CANADIAN PRESS/Jeff McIntosh)
Childs explained that right now, he is closely watching China, which appears to be dropping strict COVID-19 lockdowns and rejoining the world’s economy.
“So they’re going to return and get back to engaging in the world economy, which should mean an increase in demand for commodities, including stuff we produce here in Saskatchewan,” Childs said.
According to Childs, that could help Saskatchewan navigate through a global recession better than other parts of the country and the world.
What will need to happen for a recession to set in is two consecutive quarters of negative GDP growth.
“That means we have less economic activity taking place and it’s [the economy] shrinking,” he explained.
Childs said during that time there is also a rise in unemployment, price stabilization with inflation disappearing in most scenarios.
“Recessions tend to be hard on the stock market. So you might see some stocks become a better value proposition. It [a recession] tends to tame inflation.”
With many people also concerned with housing prices and interest rates as of late, Childs said a potential recession likely wouldn’t do much to Saskatchewan housing prices.
“It might do more in say Vancouver or Toronto where we’ve got this huge international component to demand relative to Saskatchewan it’s not that big overall.
Childs said the Bank of Canada‘s rate increases in 2022 might be able to pull off “a soft landing” that slows inflation just enough to not cause a recession, but it’s not a scenario that he feels is likely to unfold.
“I’m not optimistic, but some people are,” he said.
CTVNews.ca Top Stories
'A beautiful soul': Funeral held for baby boy killed in wrong-way crash on Highway 401
A funeral was held on Wednesday for a three-month-old boy who died after being involved in a wrong-way crash on Highway 401 in Whitby last week.
'Sophisticated' cyberattacks detected on B.C. government networks, premier says
There has been a "sophisticated" cybersecurity breach detected on B.C. government networks, Premier David Eby confirmed Wednesday evening.
Police handcuff man trying to enter Drake's Toronto mansion
Toronto police say a man was taken into custody outside Drake's Bridle Path mansion Wednesday afternoon after he tried to gain access to the residence.
Biden says he will stop sending bombs and artillery shells to Israel if they launch major invasion of Rafah
U.S. President Joe Biden said for the first time Wednesday he would halt shipments of American weapons to Israel, which he acknowledged have been used to kill civilians in Gaza, if Prime Minister Benjamin Netanyahu orders a major invasion of the city of Rafah.
Rookie goalie Arturs Silovs to start for Canucks in Game 1 vs. Oilers
Rookie goalie Arturs Silovs will start in net for the Canucks as Vancouver kicks off a second-round series against the Edmonton Oilers Wednesday night.
Nijjar murder suspect says he had Canadian study permit in immigration firm's video
One of the Indian nationals accused of murdering British Columbia Sikh activist Hardeep Singh Nijjar says in a social media video that he received a Canadian study permit with the help of an Indian immigration consultancy.
Pfizer agrees to settle more than 10K lawsuits over Zantac cancer risk: Bloomberg News
Pfizer has agreed to settle more than 10,000 lawsuits about cancer risks related to the now discontinued heartburn drug Zantac, Bloomberg News reported on Wednesday, citing people familiar with the deal.
Quebec premier defends new museum on Quebecois nation after Indigenous criticism
Quebec Premier Francois Legault is defending his comments about a new history museum after he was accused by a prominent First Nations group of trying to erase their history.
U.S. presidential candidate RFK Jr. had a brain worm, has recovered, campaign says
Independent U.S. presidential candidate Robert F. Kennedy Jr. had a parasite in his brain more than a decade ago, but has fully recovered, his campaign said, after the New York Times reported about the ailment.