Reports are emerging that Canada has demonstrated to be the best prepared country amid the global recession.
That’s what we’re hearing but we’ll still feel the pinch because our economy is so closely related to the USA economy. I suspect the auto sector will be just as hard hit. To my understanding one of the major factors Canada isn’t falling as hard is the fact that the CDN banks were government regulated so we never had the banking crash as in the US.
I gotta tell ya, in my little city (the city of Rim, Waterloo Ontario), i have yet to see any signs of a recession/slow down. The malls are packed every weekend, people are in and out of BestBuy all day long and even the car dealerships seem to be fairly busy still. I would imagine it is because our city is made up of tech/insurance with 2 major Universities thrown in for good measure but yeah, I haven’t seen it yet. Hopefully I won’t.
K-W has changed a lot since I was a WLU student thirty years ago. Back then Waterloo was always recession proof but Kitchener was full of small factories that always felt an economic downturn. I’m now in eastern Ontario. Belleville/Trenton are having plant layoffs but a university/government town like Kingston will probably not notice much other than Queen’s recently laying off a few profs.
My wife grew up in St. Thomas - a Ford town. The plant is down to only one shift from the usual three so any Ontario auto town will be hurting.
I am guessing that the two most significant factors have been:
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For the past 10 years, for governments at all levels in Canada, debt has been a four letter word and while they may be tipping into deficit now, the books were in good shape heading into this. It got to the point that as a politicion, unless you were running on a balanced or surplus budget platform, you had no chance of getting elected.
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Our banks are much more conservitive and regulated than those in the U.S. - getting a loan and credit here is hard. They really put you through the ringer. It’s a pain when you are applying for a loan or a mortgage, but now in hind-site, it’s looking like this may have been the better approach.
I’ve been seeing the same thing here in Toronto. The malls are still jam packed so much that you can’t get a parking spot. All of my clients downtown are still in good shape (or at least they seem to be). No big layoffs that I’ve heard about, although I think they’re all being conservative with new hires and they are paring down in a few spots where employees weren’t performing well. In the past, they would have given those employees more time to improve, but now they are making decisions faster.
Our biggest problem here is our mayor. I think he’s the only politician in the world who raises taxes during a recession. Oh, and I’m not too happy with the provincial gov’t either. They should have delayed the increase in the minimum wage.
Last month I opened a flexible GIC with the interest rate of 1.5%. Yesterday I went to the bank for some partial redemption and the banker advised me to keep the GIC alive at all costs, because they won’t pay the new ones more than 0.4% for the time being.
I was in the Eaton centre the other weekend and I noticed the opposite. While still “busy” it wasn’t as busy as it normally is for sure. I wasn’t feeling claustrophobic.
Go past the Yorkdale mall though and that place is ALWAYS packed full of peeps. 
I almost never shop downtown, although I was at the Eaton center on a Saturday in January and it was quite busy. Yorkdale is such a headache. If you’re not there by 10:30 then just forget about getting a parking space unless you follow someone out the door to their car.
The other thing I’ve noticed is that people are still going on vacations. The vast majority of people I know went on a big trip during March Break. In fact, only 1 of my daugher’s friends stayed in Toronto during March Break. It seems like most people are still doing their thing.
The other thing I’ve noticed is that people are still going on vacations. The vast majority of people I know went on a big trip during March Break. In fact, only 1 of my daugher’s friends stayed in Toronto during March Break. It seems like most people are still doing their thing.
There has definitely been a reduction in air travel. A buddy of my dad’s is a pilot for AC and he was telling me on his last trip to TO that the airport was absolutely DEAD. Almost no planes in the air, and almost none at the gates. People may still be traveling, but I think they’re driving more and looking for less expensive travel options.
My boss flies Vancouver/Toronto return at least once a month, almost always on WestJet, and the four return flights he’s done so far this year have all been absolutely packed. Maybe people are switching to WJ because they perceive it as cheaper?
No perception. West Jet is the cheapest. I’ve been flying my two kids back and forth from BC to Ontario for several years since my ex moved to BC and WJ has always had the best prices.
Cheaper and better service. I don’t think he was talking about the number of passengers per plane, but rather the number of planes in use. Also the total number of people in the airport.
Mind you, I think WestJet flies out of a different than does Air Canada, so if everyone’s flying WJ then that makes sense too… 
My husband flies Air Canada 2 or 3 times a month going into the US. Things at the airport seem to be as busy as usual according to him. Plus, I’ve heard that Porter Airlines is doing very well flying out of the island airport. They keep adding more routes.
I’ve been seeing the same thing here in Toronto. The malls are still jam packed so much that you can’t get a parking spot.
Our biggest problem here is our mayor. I think he’s the only politician in the world who raises taxes during a recession. Oh, and I’m not too happy with the provincial gov’t either. They should have delayed the increase in the minimum wage.
x2
I do know quite a few people who are unemployed right now and I’ve been reduced to part time.
Ken
Reports are emerging that Canada has demonstrated to be the best prepared country amid the global recession.
http://www.bbc.co.uk/...s/stephanieflanders/
We may be better prepared but we are not going to get by unscathed. I know that our tourism industry in the Okanagan has been affected, as well as the real estate market.
My business (restaurants at a ski resort) has taken about a 22% hit this year from last year. Mind you that is after 5 consecutive double digit increase years. A lot of that business decline is from a marked reduction in American tourism.
We got back from Fernie 10 days ago. Luckily we arrived after they’d had 70" and it continued to snow whilst we were there. We could not believe how deserted it was, we never rode a single lift that was full, always just the two of us on a quad or triple. There is no way that could be making money whilst we were there, it was unbelievable.
**My business (restaurants at a ski resort) has taken about a 22% hit this year from last year. Mind you that is after 5 consecutive double digit increase years. A lot of that business decline is from a marked reduction in American tourism. **
CC,
That’s a good point - while business may be down, this is coming on the heels of 4 - 5 years of record breaking and unprecedented growth for many sectors of the economy. The businesses that will really suffer and possibly go out of business, are ones that were way over leveraged - they were built around that growth, but that sort of growth is unrealistic and unsustainable.
Triathlon is a great example of that - the last 5 years have seen crazy growth in the sport. Polls here on ST and elsewhere have confirmed that the triathlon population has doubled in the last 5 years. Waht we will see this year is a slowing down of that growth - which may not be such a bad thing as that will allow us to get back to more realistic growth numbers and more real business models. There will be some carnage, but the strong stable companies will see this through and actually be in better shape when all is said and done.
Although we are doing much better than our southern friends, lets not get too cocky. Our banks are in better shape, but they have had the fear of god put into them. They are simply not lending money if they dont have to.
I am in new development commercial real estate and my business has completely died. Banks simply wont lend money to developers any more. Yes the average joe still has discretionary money, however, it will eventually trickle down and everyone will feel the pinch.
From my industry, here is a good barometer. I remember about 2 years ago reading about Starbucks having some troubled locations in the USA. I didnt think much of it. However, as things played out, that was a forshadowing of things to come. I use Starbucks as a good example because I am a firm believer that one of the first things an end consumer will cut out if they are feeling a little insecure is a $5 latte. as we all know Starbucks has shut down or are shutting down stores in the state left right and centre.
Now Canada. Q4 last year Starbuck’s announces that any deal they have done for a new store but was not open yet has been cancelled. No big deal as this could be a defensive measure from a company hard hit elsewhere right? Wrong. Just last week SBUX announces the closing of existing stores right across Canada.
To me, although not the end all and be all, SBUX is a great measuring stick of what is coming down the pipe.
Now Canada. Q4 last year Starbuck’s announces that any deal they have done for a new store but was not open yet has been cancelled. No big deal as this could be a defensive measure from a company hard hit elsewhere right? Wrong. Just last week SBUX announces the closing of existing stores right across Canada.
To me, although not the end all and be all, SBUX is a great measuring stick of what is coming down the pipe.
Not sure where you read they were closing all the stores right across Canada. That hasn’t been stated.
http://www.cbc.ca/consumer/story/2009/03/30/bc-starbucks-aberdeen-closure.html
That was the first one, and it only happened today.
I think Starbucks is a special case scenario and not a store that can do well in a recession. As you say, who the heck in their right mind spends that kind of money for a drink? And I am not just talking about in a recession!