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Anyway, back to the outbreak of recession talk. A downturn is by no means the mainstream view. The International Monetary Fund on Jan. 21shavedits outlook for Canadian economic growth in 2019 to 1.9 per cent from the previous estimate of two per cent. The Bank of Canadaseesan expansion of 1.7 per cent. Both outlooks are decent, if slower than the past couple of years. “For the Canadian economy, it’s going to be fine,” Pierre Cléroux, chief economist at Business Development Bank of Canada, told me in an interview on Jan. 21. Alberta will struggle this year because of the crisis in the oil patch, “but for the rest of the country, the economy continues to perform well,” said Cléroux.

For the most part, recession forecasts have come from unreliable sources such as Doug Ford. The Ontario premiersaidon Jan. 21 that the risk that the carbon tax could cause an economic downturn is “very, very real.” That’s nonsense, as the few billions of dollars that the government might collect from the tax — all of which it says will be returned to taxpayers —equates to a sliverof Canada’s $2.2-trillion gross domestic product.

The hedge funds betting against Canada have a slightly better case. Bloomberg reported that Denver-based Crescat is shorting bank stocks because the Big Six “will be the ones to suffer from what is likely to be a major economic recession” brought on by a housing bust, according to Tavi Costa, an analyst at the firm.

The Big Six 'will be the ones to suffer from what is likely to be a major economic recession' brought on by a housing bust Tavi Costa, Crescat analyst

Maybe. The problem with that hypothesis is it forgets that Canada’s banks are too big to fail; under no circumstance would Ottawa allow any of the largest lenders to get near the brink. Much of the housing debt is backed by the government anyway, and the banks must now keep plenty of cash on hand to act as a cushion during a financial crisis. Odds of a calamity are low.