The first half of 2015 saw Canada informally enter 'recession' with two quarters of negative GDP but then, everything bounced back and policy shifts were 'proven' effective. However, that dead-canadian-cat-bounce is over as Q2 2016 GDP growth just slumped 1.6% - double-dipping to the worst since Q2 2009. The problem with this plunge is that oil prices actually had their best quarter in 7 years as the economy tanked.

As Bloomberg reports, Canada’s economy suffered its biggest contraction since the 2009 recession as wildfires in Alberta crimped oil production.

Gross domestic product fell at a 1.6 percent annualized pace in the second quarter, Statistics Canada said Wednesday in Ottawa. Economists expected a 1.5 percent decline, according to the median estimate of a Bloomberg survey with 24 responses. Exports of goods and services plunged at a 16.7 percent annualized pace, and Statistics Canada said that excluding the damage from the wildfires output edged up. Nevertheless, export declines ranged beyond the oil industry: automobiles and metals both fell while shipments of consumer goods posted the largest drop since 2003. Wednesday’s figures showed a good handoff to the third quarter, with monthly output rising 0.6 percent for June, faster than the 0.4 percent that economists predicted. It was the fastest gain since July 2013 and reversed a similar decline for May. The quarterly figures signaled the main forces in the economy this year are still at work: weak business investment and strong consumer spending. Business gross fixed capital formation fell 0.5 percent, the sixth straight decline, while consumer spending rose 2.2 percent. Government spending also bolstered the economy with a 4.2 percent increase, with some of it linked to Alberta relief efforts.

So Q2 was a disaster but Q3 hope is strong.

Bank of Canada Governor Stephen Poloz predicted in July that GDP would fall at a 1 percent annualized pace in the second quarter and rebound to a 3.5 percent gain in the third. The GDP report is one of the final indicators before Poloz’s Sept. 7 interest-rate decision. Economists predict no change in the key rate, which has been at 0.5 percent since July 2015, while swaps trading shows some investors are betting on a cut later this year.