With many, including former Bank of Canada Governor Mark Carney, predicting that Canada will enter into a recession in early 2023 there are several important factors employers should keep in mind.<\/p>\n\n\n\n
Recessions inherently spark anxiety due to the inability to forecast. None of us knows what will be the depth, timeframe, or impact of a recession. Fortunately for Canada, certain experts, Mr. Carney among them, are predicting that this recession could be less severe and shorter for Canada than for certain of our global partners. Several factors supporting this prediction include: Canada\u2019s strong job market; Canada\u2019s international trade agreements with G7 and Pacific Rim countries; and Canada\u2019s Emergency Wage Subsidy which prevented significant pandemic-related job losses in Canada. These factors differentiate the Canadian economy from the those of other countries.<\/p>\n\n\n\n
While businesses are still feeling the effects of the pandemic, the threat of an impending recession is certainly daunting. Generally, when companies encounter an economic downturn, cost savings become top of mind. Certain human resource options may be considered, including reducing payroll liability through a reduction in the workforce, through layoffs or terminations. While terminations may result in a reduction in payroll liability, corresponding severance costs may increase when an employee is terminated in a poor economy.<\/p>\n\n\n\n