Skip to main content

The mood in the corner offices of Canada’s publicly traded companies is the grimmest its been since the Great Recession, with the portion of companies using the word “recession” in their earnings calls rising at the fastest pace in 15 years, an analysis of call transcripts shows.

The surge in the share of Canadian companies using the R-word adds to mounting evidence that businesses are bracing for a downturn. Earlier this week the Bank of Canada released the results of its fourth-quarter business outlook survey, which showed its indicator of business sentiment falling to 0.7 from 1.74 in the third quarter.

In the bank’s outlook indicator, zero represents the historical average of business confidence. By that measure sentiment has fallen, but not into negative territory. A search of earnings call transcripts using financial-intelligence platform AlphaSense/Sentieo, on the other hand, points to much greater pessimism from executives in their conversations with analysts and investors, perhaps reflecting an attempt to manage expectations for the months ahead.

Among the chief executives and chief financial officers mentioning a potential downturn in recent calls were Douglas Murphy, CEO of Corus Entertainment Inc., who said “the macro outlook recession” is “a concern that we have”; Transat A.T. Inc.’s CFO Patrick Bui, who said “a brief and moderate recession” was built into its guidance, and Paul Einarson, CEO of Noranda Income Fund, who told shareholders that industrial production was being affected in part by “pressure on demand due to global economic recession.”