Canada is in recession

Business Insider ^ | 07/31/2015 | Sam Ro

[kabar]

Oil prices are low.

[MeganC]

“They need to elect a carload of liberals. That’ll fix it.”

They could also raise taxes and the minimum wage while they’re at it! I also understand that unionizing the whole country will go along way to providing an economic recovery!

[DungeonMaster]

So are we but it’s racist to admit it.

[VTenigma]

USA gets the sniffles and the world gets a cold. Marinate on this, GDP growth in 2014 2.4% (if you believe administration numbers). Entitlement spending as percent of GDP in ‘13 15.2% Entitlement spending as percent of GDP ‘14 19.5%. Difference 4.3%. GDP growth 2.4% - 4.3% = -2.1% GDP growth. That’s deep depression stuff right there. I’ve said all along GDP growth during the Obama caliphate of America is all based on deficit spending by the Fed Gov. We’re hosed.

[A CA Guy]

We went to Quebec this summer and IMO theyDESERVR a recessionand a seminar in manners.

[SeekAndFind]

RE: Oil prices are low.

Are North Dakota and Texas in recession too?

[kabar]

Eventually, the economies of both states will be affected. Once you get to the point where the costs of fracking outweigh the revenue, then you reduce production and new exploration. OPEC has a history of using a short term oil glut to hurt production elsewhere. Right now, the Reps are trying to remove the ban on oil exports from the US.

Canada is one of the few developed nations that is a net exporter of energy - in 2009 net exports of energy products amounted to 2.9% of GDP. Most important are the large oil and gas resources centred in Alberta and the Northern Territories, but also present in neighbouring British Columbia and Saskatchewan. The vast Athabasca oil sands give Canada the world's third largest reserves of oil after Saudi Arabia and Venezuela according to USGS

Oil (USO) (UCO) is critical for Canada (EWC). Canada’s energy-rich landscape provides the country with 24% of its export revenue. It contributes over 8% of the economy’s gross domestic product, or GDP.

Canada’s oil exports serve two major purposes for the economy:

Export revenue

Capital expenditures

Oil production and exports are a major source of income in the economy. Oil is also a prime contributor to capital expenditure in the country. Declining oil prices imply lower margins for energy companies operating in the country—like Suncor Energy Inc. (SU), Enbridge Inc. (ENB), and TransCanada Corp. (TRP).

A dip in margins deters capital investment by such companies. This leads to a slowdown in the economy. The economy thrives on energy production and exports.

[dangus]

Even if the only sector of the economy that declined was natural-resources extraction? And even the amount of natural goods extracted didn’t decline, but merely the value of those goods?

[CPT Clay]

Great, they are one of our largest trading partners.