By Andrew Mitchell
Although most economists generally wait for the U.S. Federal Reserve to officially admit a state of recession, several leading authorities on the economy say a downturn is inevitable if it’s not already here. Some are even predicting an economic depression, the likes of which we haven’t experienced in more than 70 years. The word “collapse” has been used, and by experts who know a lot more than I do.
The Bank of Canada is not as pessimistic but is predicting a slightly slower economy for the near future. As long as the demand for oil remains steady, and the market for natural resources is strong, we should be able to tread water in most scenarios.
But any ripple in the U.S., our biggest trading partner, will naturally create waves in Canada and especially in the tourism industry which relies on people having enough discretionary income to spend on luxuries like ski vacations.
Recessions are typically short-lived, usually comprising around nine months or so of stagnant activity before the whole puppet show gets going again.
We do occasionally get recessions that are accompanied by a mini economic crisis of some kind — like the Black Monday stock market collapse of 1989 that left half the parents in my middle-class suburb permanently downsized, my own father included. But for the most part a recession just means that economic growth slows or stalls and consumer spending dries up.
For the majority of people that keep their jobs, there are benefits. Prices come down for many goods and services, while central banks lower their interest rates to encourage consumers to buy and borrow our way out of the recession.
The last recognized recession was in 2000, the result of the bursting dot-com bubble, Enron, WorldCom and other financial scandals. That downturn lasted longer than many expected as a result of the Sept. 11 terror attacks, which impacted everything from airlines to the price of oil.
Unemployment was an issue across Canada for a short while, but low interest rates made it a great time to buy a new house or a car.
Whistler took years longer than everyone else to recover from that recession, as we also experienced our worst snow season on record in 2004-2005. Add in the rising cost of gas, new passport requirements, and a rising Canadian dollar, and things were looking grim — some local businesses even closed up shop, while others were right on the edge.
Things have been turning around since then, with the resort breaking two million skier visits again last winter and posting back-to-back record summers in 2006 and 2007. Bookings were well up over the holidays this year, and things look pretty solid for the remainder of the season.