The Shrine

I wanted to get in on all the Canada talk!

Canada's economy contracted by the most in nearly six years in the first quarter, with business investment and exports both falling as the country grappled with a slump in oil prices.

Growth in March was also disappointing, suggesting a weaker handoff to the second quarter than anticipated.

Gross domestic product shrank at an annualized 0.6 percent rate in the first three months of the year, Statistics Canada said on Friday, well below the 0.3 percent growth economists had forecast.

The drop was significantly slower than the fourth quarter's downward-revised 2.2 percent growth, and was the worst performance since the second quarter of 2009, when the economy was in the grips of the global credit crisis.

It was also the first time Canada's economy has failed to expand since the second quarter of 2011, which saw zero growth.

Typically, two or more consecutive quarters of contraction are considered to mark a recession.

The data was slightly worse than the Bank of Canada's anticipation of no growth, though Governor Stephen Poloz had said the quarter would be "atrocious" as oil-exporting Canada felt the pain of cheaper crude.

In Canada, business investment dropped 9.7 percent on an annualized basis, as businesses spent less on nonresidential buildings, machinery and equipment.

Investment was hurt by a decline in activity in the mining, quarrying and oil and gas extraction sectors, which dropped 11 percent annualized, driven by a hefty slump in support services.

Exports of goods and services fell 1.1 percent annualized. Consumer spending held up relatively well, however, with household expenditures edging up 0.4 percent.

http://in.reuters.com/article/2015/05/2 ... E220150529

Lot of factors at work there.

One is that Canada is, improbably, in the same boat as Russia and Iran and Venezuela: it's an oil power. When oil prices fall, Canada's economy is hurt; though it's a good thing for the environment, as the tar sands mining stops for awhile. That is the main factor in the contraction, according to the news.

http://www.huffingtonpost.ca/2015/05/29 ... 68248.html

A second factor is that the Canadian economists/central bankers don't particularly want a strong loonie. With so much economy based on exports, they want to keep their own currency weak in order to fuel those exports...but a weak currency hurts the middle class because most middle-class savings in any economy are dependent on the strength of the currency middle class homes and bank accounts are tallied in.

http://business.financialpost.com/inves ... onies-fall

And then there is a third is what I was talking about on other threads with "beggar-thy-customer capitalism". Lots of companies all over the West are still getting rich by making others poor and homeless.

http://www.vancouversun.com/life/Opinio ... story.html

Part of the reason why the NDP and Greens are seeing large gains right now.

Part of the reason why the NDP and Greens are seeing large gains right now.

I was going to say the same thing. Democracy is a little goofy like that. People are generally happy to keep electing the same clowns over and over again as long as the economy is humming along. As soon as employment/wage levels start falling though, they'll blame the currently elected officials (or the ones in the party of the president/prime minister/etc) and vote them out. This is regardless of whether the economic troubles are the fault of the party or not.