Oil sands stoppages push Canadian GDP down to 2009 recession levels
Canada's economy shrank in the second quarter of the year touching levels not seen since 2009, when the country was in the midst of a global financial crisis, mostly due to the wildfires that wrecked parts of Fort McMurray, Alberta, the heart of the oil sands industry.
Canada's economy shrank by 1.6% in the second quarter — the largest quarterly decline in gross domestic product since the second quarter of 2009.
Data from Statistics Canada shows the country’s real gross domestic product (GDP) fell at an annualized rate of 1.6% in the three-month period to June, the largest quarterly decline since the second quarter of 2009.
The contraction compares with growth at an annual pace of 2.5% in the first quarter, which was revised higher from an initial reading of 2.4%.
About a million barrels per day of oil sands crude production were shut down as a precaution and because of disruptions to regional pipelines due to the devastating wildfires that hit Fort McMurray this spring. Much of that production remained offline for weeks after the May fires.
Stats Canada’s data contradicts the Conference Board of Canada’s May report in which they claimed the outages were not going to have a significant impact on the country’s economic growth.
The agency said that excluding the large drop in crude oil output, which was the main cause of the 4.5% drop in exports during the period, Canada’s GDP would have increased by 0.1% (0.4% annualized).