By now, the glass-half-empty take on Canada is well known. Oil is in the tank, the economy just skidded into a recession and the rest of the world from China to Greece isn't helping.
How about we step away from the bad news, put on some rose-coloured glasses and make a hopeful case for the country's economy. Forget about layoffs, housing bubbles and falling markets, how could things start breaking right in the second half of the year?
A bullish case for oil
Much of the current negativity toward Canada comes from a widely held belief that falling oil prices will only be pushed lower by a global supply glut that shows few signs of easing. Low oil prices, the thinking goes, will keep Canada's petro-economy in the doldrums. It's a reasonable enough thesis. It could also be wrong.
A pessimist will see looming production from Iran and the economic struggles of emerging markets and conclude that supply and demand fundamentals say oil prices have further to fall.
An optimist, however, will start looking at shale oil production in the United States. It's remained stubbornly high in the face of falling crude prices, which has exacerbated problems for an oversupplied global market. Lately, though, evidence is trickling in that suggests the anticipated drop in U.S. output is finally playing out.
"In the next few months, I think, there will be more data that says that decline is not only continuing but it's actually starting to accelerate," Martin King, a commodities analyst at FirstEnergy Capital told CBC News. "That will cause a big change in attitude towards this bearish-scenario-forever type of thinking."
As for global demand, the hoopla over China's market meltdown is stoking considerable worry about the health of the country's economy. A positive spin, though, sees oil demand in China still ticking along nicely, as it is in much of the rest of the world. Falling prices could already be spurring global demand growth that will start showing up next year.
Some of the looser figures bandied about suggest the world's oil market is oversupplied by as much as 3 million barrels a day. King believes the amount is closer to 1.5 million barrels.
If that's the case, then a combination of healthy global demand and falling U.S. supply could see crude markets come back into balance by the middle of next year, returning prices into the $60 US-a-barrel range from the $40s. At that level Canada's oil companies may not be minting profits, but it would be enough to start rebuilding a sector that's grinding through job losses, falling revenues and investor disinterest.
China and the U.S.
The coverage of U.S. Federal Reserve chair Janet Yellen's every breath ahead of the her next interest rate decision later this month can give the impression the U.S. economy is on tenterhooks.
Precarious as conditions may seem for Canada's biggest trading partner, the numbers show the U.S. is actually doing quite well.
"You can put together a reasonable picture that the U.S. is an economic island and, despite what's happening globally, they will continue to expand and do better than expected," said Benjamin Tal, the deputy chief economist at CIBC World Markets. "They're generating jobs, wages are rising, they're spending, so you can definitely make the point that the biggest economy in the world is moving in the right direction and moving even faster than we expected, so that's always good."
The double whammy of U.S. economic strength and falling oil prices that's driven the loonie into the 75-cent US range may not be great for vacationing abroad, but it will do wonders for Canada's export sector. It's a story that's expected to play out slowly but surely.
Canada's manufacturing sector, Tal says, may not end up bigger than it once was, but a fresh round of currency-inspired investment dollars will see it emerge stronger and more productive than before.
In the long run, Tal says, even China's efforts to control its stock market, which spurred the recent bout of market turmoil, can be taken as evidence the country's economic reforms are continuing apace. As China's economy continues to become more legitimate, eventually a more open market there will only mean good things for Canada.
Back to oil
Canada's economic fortunes may not turn around tomorrow, but insofar as they're tied to oil, there may be more to hang on to than is immediately apparent. The idea that the best cure for low prices is low prices is an old chestnut for a reason. Demand may already be coming back.
"It's really hard to calculate the impact of low prices to the industrial consumer and the benefit they get today when one of the highest cost components of their business is cut in half," said Rafi Tahmazian, a senior portfolio manager at Canoe Financial. "Everyone's focusing on the top down, but in the meantime is the bottom supporting itself? It might be doing that with this lower oil price."
The chatter in downtown Calgary suggests the next few months could be filled with word of more layoffs and corporate suffering. Sugarcoating that doesn't make sense.
That said, Canada's boom-and-bust energy sector is no stranger to the vicissitudes of a cyclical industry. Such experience alone suggests that rough times can be taken as a sign that better days are just around the corner.
"The market is discounting a lot of bad news," said CIBC's Tal. "I think Canada has a lot more to offer than is perceived right now."