Canada has fallen into a recession, dragged down by falling energy prices and economic troubles in China. The world's 11th-biggest economy retreated at an annual pace of 0.5% from April through June after sliding 0.8% in the first three months of the year, meeting the technical definition of a recession, according to Statistics Canada. The economic news could spell trouble for Prime Minister Stephen Harper during the Oct. 19 election. Analysts call the three-way race a toss-up, and Harper, campaigning for a fourth term on a record of economic growth, refused yesterday to recognize that Canada is in a recession. He says the economy is bouncing back after a brief bump.
"I think it's more important to describe the reality of the situation rather than to have labels," Harper says, calling Canada an "island of stability" amid rough financial waters. The country avoided the worst of the 2008 global financial crash and fared better than most nations. Unlike the US, it avoided a real estate market implosion or credit crisis. "We've had a couple of weak months, but the fact of the matter is over the long haul, post the global financial crisis, Canadians know there is no better place to be," says Harper, who has been in power since 2006. Analysts say that in October, the left-of-center opposition New Democrats, led by Tom Mulcair, have a chance to gain power for the first time. (In Quebec, people are cutting their money in half.)