Recession fears all too real for Canadians struggling to cope
Underemployment, debt can make it difficult to get by, despite a good education
LaSania Hamilton doesn't need economists to tell her the Canadian economy is in trouble. The 31-year-old says she's living it.
"I do think it's very bad right now," says the underemployed paralegal from Mississauga, who states she barely earns a living wage.
There have been rumblings Canada is falling into a recession ever since new Statistics Canada numbers last week showed the economy shrank in April — the fourth monthly decline in a row.
While that's technically not long enough to use the R-word, a growing chorus of economists is predicting the economy will slow again this quarter, putting Canada officially in a recession.
"I do feel like we're heading towards a recession," says Hamilton. "I know so many people who graduated [from post-secondary school] and can't get a job. Everyone's frustrated."
The story behind the numbers
- LaSania Hamilton
The latest job numbers for June, released on Friday, show the economy lost another 6,400 jobs during the month.
It's an employment slowdown that Hamilton is all-too familiar with. On paper, she counts as employed. But after earning a master's degree in criminology and then a paralegal diploma, Hamilton has only been able to land low-paying work as a legal assistant.
"I am nowhere near where I would like to be in my career," the single mother says.
She's also nowhere near where she'd like to be financially. She still owes "a great amount of debt" in student loans and says once she pays her monthly bills and rent, there's barely enough left over for food for her and her eight-year-old son Jair.
"It's actually heart-wrenching. I find myself in tears a lot of the time because even when my son asks me for little things like even a toy, I always tell him, 'No'."
Hamilton dreams of one day opening her own paralegal practice or even becoming a lawyer. But, right now, she feels she's trapped in stagnant economy where she can't get ahead and still has to rely on her parents for financial support.
"I'm almost 32 years old and I don't feel like I should have to do that. I should be making a good salary in order to be financially independent, but I'm not there yet."
There are other signs that Canadians are struggling.
According to a recent CIBC report, the number of people no longer able to pay down their debt is on the rise for the first time since the 2008 recession. The total number of insolvencies rose by 1.2 per cent in the six months ending in February.
But Benjamin Tal, the report's author, cautions not to read too much into the numbers — yet.
The CIBC economist explains the insolvency rate was very low, so an increase is not surprising. But he says if interest rates rise, more Canadians will go bankrupt due to ballooning debt payments.
"There's simply enough people [living] at the margin that will feel the pain," he says.
But Tal doesn't think we're headed for a new recession. Instead, he believes we were already in one and now we're on our way out — if ever so slightly. "Most of the damage is done already," he says.
He believes Canada's beleaguered oil and gas industry has already seen its worst days. "A lot of capacity has been cut, a lot of downsizing has happened. It will continue but at a slower rate."
He also says the stronger American economy and a weak Canadian dollar will help Canada. But he spies a weak spot: "We're still waiting for the manufacturing sector to wake up and that's the big disappointment."
Manufacturer John Hayward has seen the Canadian segment of his business decline.
The company he co-owns, Hayward Gordon, based in Halton Hills, Ont., produces processing equipment like pumps and mixers. It services not only Canada's oil and gas sector but also the mining industry, which has been hard hit due to falling commodity prices.
Until last year, 50 per cent of the company's business was in mining. This year, it's dropped to less than a quarter.
But Hayward hesitates to use the R-word. "Maybe it's going to be quite slow. But I'm not quite sure a recession is in the cards."
He's recouping lost business by expanding in other countries, especially the U.S. "We saw this coming and our efforts to try and make up for the slowdown is having to come largely from outside of Canada just because our prime industries are hurting."
The bright spot for him is a low Canadian dollar that can attract U.S. business.
"I think there's real hope [the weak dollar] is going to be a help. I mean, it's definitely helping us."
Unfortunately for Hamilton, she's not seeing any bright spots. She's not sure what else she can do but hope for an uptick in the economy that might lead to more opportunities.
"I do feel like my life is on hold," she says.