North American investors are also clearly jittery, as evidenced by sharp stock market slides last week, in response to inflation, Chinese zero-COVID policy lockdowns and Russia’s invasion of Ukraine.
But just as B.C. escaped the worst impacts of the 2008-09 recession, B.C. economists think the province could be spared the worst financial impacts if the Canadian economy did slide into recession.
“Our base forecast for B.C. doesn’t include a recession,” said Jock Finlayson, economist and senior policy adviser for the Business Council of BC. “But the risk of that has certainly increased. Six months ago, the risk would have been nugatory.
“For B.C., if we think about a scenario where North America – the U.S. and Canada together – actually go into a recession some time in the next 12 months, which I don’t think is very likely, could we potentially be spared? I think the answer is yes.
“Even if Canada and the U.S. had a technical recession, I think we would have a chance to avoid that in B.C.”
B.C. was spared the worst of the 2008-09 recession, partly due to all the spending and building that had been going on in the lead-up to the 2010 Winter Olympic Games.
“We didn’t actually avoid recession in 2009,” Finlayson said. “We had a milder recession than Canada and the United States.”