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
Police arrest 3 Indian nationals in killing of B.C. Sikh activist Hardeep Singh Nijjar
Three people have been arrested and charged in the killing of B.C. Sikh activist Hardeep Singh Nijjar – as authorities continue investigating potential connections to the Indian government.
Police officer hit by driver of fleeing vehicle in Toronto
York Regional Police say they are continuing to search for a suspect in an auto theft investigation who was captured on video running over a police officer in Toronto last month.
TD worst-case scenario more likely after drug money laundering allegations: analyst
TD Bank Group could be hit with more severe penalties than previously expected, says a banking analyst after a report that the investigation it faces in the U.S. is tied to laundering illicit fentanyl profits.
Human remains found in rural Sask. possibly a decade old, RCMP say
RCMP say human remains found in a rural area in central Saskatchewan may have been there for a decade or more.
Five areas Canada's foreign interference commissioner says needs more investigation
Commissioner Marie-Josee Hogue released her interim report examining foreign election interference on Friday. Here are five elements of the issue that Hogue says she needs to further probe before she can make conclusions or recommendations.
New weight-loss drug Wegovy not a 'magic bullet,' doctor warns
As Wegovy becomes available to Canadians starting Monday, a medical expert is cautioning patients wanting to use the drug to lose weight that no medication is a ''magic bullet,' and the new medication is meant particularly for people who meet certain criteria related to obesity and weight.
Drew Carey is never quitting 'The Price Is Right'
Drew Carey took over as host of 'The Price Is Right' and hopes he’s there for life. 'I'm not going anywhere,' he told 'Entertainment Tonight' of the job he took over from longtime host Bob Barker in 2007.
Why your airfare may be getting more expensive
Skyrocketing airfare prices are linked to heightened competition and rising food and fuel, according to the CAA.
Manitoba man sentenced to house arrest for keeping fishing tournament funds meant for Children's Hospital Foundation
A Manitoba man who pleaded guilty to keeping the funds raised from an ice-fishing fundraiser for the Children's Hospital Foundation of Manitoba has been handed a sentence of 18 months house arrest.