Four ways the fall economic statement could help prepare all of us for the coming recession

This column by Armine Yalnizyan was originally published by the Toronto Star on Wednesday November 2, 2022. Armine is a Contributing Columnist to Toronto Star Business featured bi-weekly.

The fall economic statement comes out on Thursday and, regardless of what’s in this mini-budget, it promises to be a big deal.

The federal government’s regular fiscal update on how the budgetary year is unfolding usually doesn’t merit much of your time or attention. This year is different because so much has happened since April, when the federal budget was tabled.

  • Inflation is rising at a pace not seen in 40 years; though, unlike 40 years ago, the problem isn’t soaring wages, which today are badly lagging price hikes. Today the problem is a stubbornly inadequate supply of food, fuel and affordable housing — as well as an unknown degree of corporate price-fixing.
  • Russia’s never-ending invasion of Ukraine has choked off a surprisingly large share of global exports of wheat, fertilizer, maize, oil and gas.
  • The Bank of Canada has hiked borrowing costs six times since March, its most aggressive campaign to tame inflation since the early 1990s.
  • Reports from the International Monetary Fund forecast a world economy in decline; and
  • Canadian hospital emergency rooms are closing from coast to coast, for lack of staff.

People are anxious. The world is talking about recession. No matter Canada’s economic fundamentals — we are doing better on growth, inflation and even government borrowing than most places — we won’t duck bad times if the economies of the U.S., U.K., EU and China stall, or worse.