The Canadian economy is "technically" in a recession, as 2015 ended with two consecutive quarters of contracting GDP. Whether or not you personally agree with classifying the current economic situation as such, we are going through tough times.
However, the recession does not seem to be bothering most Canadian economists -- or, for that matter, most Canadians. The sentiment was best summed up by a quote from Doug Porter, chief economist at the Bank of Montreal: "Best. Recession. Ever."
Why would a recession be treated in such a cavalier fashion? Time magazine says "it's because it appears this current recession is atypical in several ways and Canadians have good reason for optimism based on other economic aspects."
Other signals only add to the confusing outlook on the overall economic condition and direction, including housing prices with almost everyone now voicing concerns about high-priced real estate across the country, including the Property Brothers!
With all the different economic data points pointing in varying directions, real estate website and apartment finder RentSeeker.ca researched and curated a more simplified list of points for readers to try and get a better perspective of the overall economic outlook, including the housing and rental markets.
Over the last year, the Bank of Canada has held fairly steady on interest rates, but an adjustment may be on the way, very soon. The head of RBC Dominion securities warned "...there are a number of recession indicators that are flashing warning signs" and there has been a slow decline in the TSX for months.
This week it closed at levels 20 per cent lower than what they were in the fall of 2014, and these indicators lead many to think that the Bank of Canada will lower interest rates. Governor Stephen Poloz recently announced that the organization will keep its key interest rate at 0.5 per cent, preferring to see how the economy performs before potentially cutting it further. Lowering the current rate would indicate that we're currently in a recession as the Bank foresees tough times ahead.
Another justification for a potential drop in interest rates is the plummeting price of oil. JP Morgan stated that oil prices are plummeting to levels so low they match producers operating costs, meaning there are no profits to be had for Canadian oil companies. To further compound the problem, the weak Canadian dollar makes a barrel of oil worth about US$10.
To prove the point, the oil patch lost almost 40 000 jobs in 2015. The only benefit is that Canadians are filling up their tanks at prices we haven't seen in years. Overall however, our nation depends heavily on the global price of oil, as it's our largest commodity export.
Unfortunately, the end is nowhere in sight, and the dreams of Canada being an energy superpower couldn't be further from reality. The effects of the global oil flood are tearing holes in the Canadian economy and these record lows for crude will be a major cause for the prolonged continuation of the Canadian recession.
In November of last year, Canada lost over 35,000 jobs. The unemployment rate in Alberta has nearly doubled since the start of 2015, and finding a job isn't easy for recent graduates across the country.
According to StatsCan, Ontario did see job growth, although the opposite has occurred in Alberta. One of the big concerns is how we compare against the U.S. unemployment rate, and we're not doing well.
Doug Porter, chief economist at the Bank of Montreal pointed out that the Canadian unemployment rate hasn't fared this poorly against the U.S. rate in nearly 15 years, as we sit at over seven per cent while the U.S. is much closer to four per cent. While the U.S. slowly climbs out of its own recession, it doesn't appear we're following, yet.
It's not encouraging to think that the Loonie hasn't fallen to its lowest point. However, all of the aforementioned factors contribute to low prices for the Canadian dollar, and the end isn't in sight. Some economists are predicting that the Loonie could fall to 59 cents U.S. by the end of year.
There is an upside, however. The low value of Canadian currency boosts tourism, as the weak Loonie always attracts visitors, especially from the U.S.. Forbes contributor Ann Abel listed British Columbia on her list of the 14 Coolest Places To Visit in 2016 and the NBA All-Star Game in Toronto is expected to bring in between $90 and 100 million. While an increase of tourists will help bring money into Canada, it won't be enough to have a major impact on a national level.
Foreign Investment and The Housing Market
Of all the economic factors affected by a low Canadian dollar, foreign investment is one of the hottest topics, especially when it comes to the real estate market. While there are calls for foreign investment reform in British Columbia, foreign buyers are keeping construction companies busy in Toronto and Southern Ontario building homes and condos.
Other factors which are keeping Canadian housing prices at record highs include low interest rates and borrowing costs, and the low Loonie which continues to attract foreign investors.
While economists continue to predict a correction in the housing market year after year, the rent v. buy debate continues to be a discussion as well.
For reference -- here are two INFOGRAPHICs from RentSeeker.ca showing the Average Cost to Purchase a Home in Cities across Canada, and the Average Cost of Rent across Canada.
Although the road ahead may look a bit gloomy to some, Canadians will continue to work hard and power through the tough times. Canada will continue to be the great country we are known to be -- it's simply the Canadian way!
Follow HuffPost Canada Blogs on Facebook
MORE ON HUFFPOST: