Why Canada’s economy was so ‘ugly’ in the second quarter

The Canadian economy shrank 1.6 per cent in the second quarter, with Alberta’s wildfires taking much of the blame for the poorest quarterly performance since the Great Recession. Statistics Canada said Wednesday real gross domestic product declined by an annualized 1.6 per cent from April to June, slightly more than the 1.5 per cent economists had expected. That was the largest quarterly decline since the second quarter of 2009, when the country was grappling with the fallout from the global financial crisis.“We knew for the past four months that today’s GDP report was going to be ugly, and it delivered with a capital U,” BMO chief economist Douglas Porter wrote in a note. The decline was much worse than the 1-per-cent contraction the Bank of Canada had predicted in its June monetary policy report.The story behind the headline number was largely due to the 16.7 per cent annualized drop in exports, …