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Chronology

Recession 'relatively mild in Canada' Add to ...

Canada's real gross domestic product fell 2.6 per cent last year, one of just three annual declines since comparable record keeping began in 1961.

The only other annual drops were in 1982 and 1991, according to Statistics Canada.

Last year's recession can be summarized as "short but severe," says Philip Cross, Statscan's chief of current economic analysis. Still, "so far, while it's been the Great Recession in the U.S. and other countries, it's been relatively mild in Canada," as measured by GDP, duration and the jobless rate, Mr. Cross said.

Last year's downturn was shorter than the previous two recessions. In terms of severity, it more closely resembled 1991's recession and was less severe than that of 1982. And the jobless rate isn't nearly as high as in the past.

How the three declines compare:

1982: Economy drops 2.9%

The downturn: Inflation hit a staggering 12.5 per cent in 1981. Job losses mount, interest rates soar and mortgage rates jump to 25 per cent. "It was unlike anything we had seen before, or after," Mr. Cross says.

The labour market:

The jobless rate peaks at 13.1 per cent in December, 1982. It subsides a bit to 11.3 per cent in the first year of recovery. The labour market doesn't fully return to pre-recession levels until 1988 - six years later.

The recovery:

GDP bounces back quite sharply, forming a V-shaped recovery, though business investment and employment gains lag.

1991: Economy drops 2.1%

The downturn: Inflation heats up, and then Iraq invades Kuwait, sending oil prices zooming. Canada introduces the GST. Economic activity plunges in the first quarter of the year, as consumers hunker down and slash spending. The economy bounces back in the next quarter - but then drifts sideways in subsequent quarters.

The labour market:

The jobless rate hits 10.5 per cent in March, 1991 - and rose further to 12.1 per cent in 1992 even though the worst of the recession was over.

The recovery:

A tepid recovery means joblessness remained at or near double-digit territory until 1997.

2009: Economy drops 2.6%

The downturn: A U.S. recession turns global, sapping demand around the world and prompting unprecedented government and monetary policy stimulus. Exports tumble 14 per cent and business investment in plant and equipment falls 17 per cent. Canadian activity deflates in the first half of the year, is flat in the summer and picks up in the fall.

The labour market:

The jobless rate peaked at 8.7 per cent in August. The economy lost 240,000 jobs last year. The labour market stabilizes in last quarter of the year.

The recovery:

The rebound takes hold in the last four months of the year. The fourth-quarter sees the biggest GDP jump in nearly a decade. The sustainability of the recovery, however, is still unknown.

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