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As it happens, I subscribe to the view that we’re not in a recession, at least based on available data. To the extent that recessions represent a significant, prolonged and generalized reduction of economic activity, the current situation does not meet the criteria. Recessions lasting six months are not unknown, but I don’t find the decline in activity to be significant or generalized.

Saying that we’re not in recession is the same thing as saying that what we’re seeing now is about as good as we’re likely to see for many years

The effects of the drop in oil prices have been largely confined to the energy sector and Alberta, and haven’t been severe enough to affect employment at the national level: 180,000 more Canadians were employed in July 2015 than when oil prices peaked in June 2014. And employment increased by more than 100,000 in the first five months of 2015, even as GDP was falling.

(I should note here that I am a member of the C.D. Howe Institute’s Business Cycle Council, which decided on the basis of information available on July 22 that there wasn’t yet enough evidence to conclude that Canada had fallen into recession.)

The problem is that while economic activity is holding steady, these activities aren’t generating as much revenue as they used to: estimates for gross domestic income (GDI) — which capture the changes in income produced by changes in the prices of exports and imports — fell by 1.2 per cent in the first quarter of 2015. As far as purchasing power and real incomes go, that reduction in GDI was a much bigger deal than the 0.1 per cent drop in GDP that has generated so much recession chatter.