This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Philip Cross, June 10, 2026
Following Statistics Canada’s publication of this year’s first-quarter GDP estimates there has been much debate about whether or not Canada is in a “technical recession.” What happens to the economy in the short run is important but dwelling on it distracts from Canada’s real economic problem, which is its lack of growth over the past decade.
As applied to recessions, “technical” is vague and misleading. There is nothing especially “technical” about using consecutive quarterly declines in real GDP to define a recession. The convention first appeared years ago when the National Bureau of Economic Research, based in Cambridge, Mass., observed that U.S. recessions typically lasted about six months. But neither the NBER nor StatCan nor the C.D. Howe Institute, which has a committee that makes recession calls in Canada, has ever used that criterion alone to establish when a recession has taken place.
People use “technical” to give the impression of authoritative expertise, when in fact using an arbitrary rule like consecutive quarterly declines sidelines the judgment needed to read the different signals that GDP, labour market and other data may be sending about the economy — not to mention assess the quality of the preliminary estimates of this data.
***TO READ THE FULL ARTICLE, VISIT THE FINANCIAL POST HERE***
Philip Cross is a senior fellow at the Macdonald-Laurier Institute.
