The Sources of the Recession in Canada : 1989-1992

The Canadian economy entered a recession in the second quarter of 1990, following a period of slowing real growth over the previous year. The recession technically lasted four quarters,1 about average length for postWorld War II recessions in Canada. However, the recovery, which began with a one-quarter growth spurt in the second quarter of 1991, has been anaemic. Real growth over the first seven quarters of recovery averaged 1.3 per cent (annual rate), well below the historical norms for previous early recovery periods, and well below the growth of potential output. Key aggregate indicators for the 1989-92 period are presented in Table 1.