Economic woes: Canadian recession worries linger as calendar turns

After an unpredictable few years, many Canadians are concerned 2024 could bring with it some tough economic times. 

A new survey by Leger found 72 per cent of respondents are worried about the possibility of a recession. 

And the data isn't ruling it out.  

As Canada’s Central Bank tries to slow the economy and cool inflation, its interest rate hikes have contributed to economic stagnation. 

Inflation has cooled, but prices haven't dropped, and spending levels aren't evening out. The unemployment rate also rose slightly in 2023. 

It's all resulted in five months of little to no economic growth -- and Canuck confidence reflects just that. 

"The overwhelming majority of Canadians are worried about a recession," John Shmuel with Rates Dot Ca said. "That's a very serious number. If you look at what we've seen in the past few months, the economy is clearly not strong and (people) are feeling that."

Bank of Canada Governor Tiff Macklem recently spoke to BNN Bloomberg about the coming year. 

He warned the first half could be especially difficult as the ripple effect of rate hikes hits more and more homes. 

"We do expect it's going to be a year of transition," he said. "The first part is not going to feel good: I'm not going to sugarcoat it."

But all hope is not lost. 

Almost 80 per cent of survey respondents last year felt an incoming recession that -- depending on who you asked -- either didn't happen or only slightly materialized. 

The economy has slowed, but it was a somewhat unpredictable year. 

And so, Shmuel says, some optimism isn't entirely misguided.

"There are more and more people that are dying to use this economic term called 'soft landing,'" he said. "That's where efforts to cool an economy don't result in a recession, but just a market slowdown."

Data suggests that soft landing is possible, but Macklem is still warning Canadians to save if possible, and to not rely on an immediate strong turnaround.

LEGER SURVEY

The recession pessimism was discovered by online survey of 1,530 Canadians adults, conducted between December 8 and 10, 2023.

Leger's online panel did the work on behalf of BNN Bloomberg and Rates Dot Ca. 

It says no margin of error can be associated with a non-probability sample, but for comparative purposes, a probability sample of 1,530 respondents would have a margin of error of 2.5 per cent, 19 times out of 20.