Balance Sheet Recessions and Canadian Vulnerability
By Nicholas Cormier
The financial crisis in 2007 caused a recession of magnitude and length that has not been seen in North America since eight decades ago during the Great Depression. GDP growth has since returned to positive territory and the recession has ‘ended’, however unemployment remains elevated at 7.4% in Canada and 9.1% in the United States, both of which are at levels significantly higher than their long run averages. Perhaps even more important is the decrease in the employment to population ratio, which has also fallen significantly. This metric has the added benefit of picking up those persons who have chosen to remove themselves from the labor force, and are therefore no longer looking for work.
