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OTTAWA — Canada’s economy was hit harder than expected in the first quarter of 2015, contracting by annualized 0.6 per cent — the first drop in nearly four years — as oil and gas activity fell amid the plunge in crude prices.

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The U.S. economy contracted in the first quarter as it buckled under the weight of unusually heavy snowfalls and a resurgent dollar, but activity has rebounded modestly.





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Business investment also fell and household spending slowed between January and March, Statistics Canada said Friday, while both exports and imports declined.

The dismal data caused the Canadian dollar to drop almost half a cent to 79.96 U.S. cents.

The fallout from the energy slump — particularly in resources-dependent Alberta —had been well-telegraphed. Bank of Canada governor Stephen Poloz had warned the impact of the collapse in oil would be “front-loaded” and took the pre-emptive move of cutting interest rates as “insurance” against further blows to the economy. In an interview with the Financial Times, he predicted first quarter GDP would be “atrocious.”