Fears of recession in Canada grow as holiday spending looms

There are growing concerns a recession will hit Canada sooner than first predicted. There are already worrying signs — a housing market slowdown, scorching inflation — and rising interest rates. Many economists are predicting a mild recession will start in the first quarter of 2023.

"When the cost of living goes up, if everyone feels the pressure, we can certainly try to relieve that pressure by reducing our spending. But at the same time, we can only reduce our spending by so much," economist Anupam Das told Global News.

Das estimates food costs are up between 15 and 20 per cent, and that natural gas and electricity costs could double this winter. With many mortage rates coming up for renewal, the reality of higher interest rates is expected to weigh heavily.

But will the threat of an economic downturn put a damper on holiday spending? Sarah Offin reports.