During this period, the Canadian government also provided longer-term funding to Canadian banks to prevent a severe credit crunch in the private sector (Chart 3).1 As a result of these actions, Canada’s core funding markets stayed open, and credit kept flowing to the private sector (Chart 4).
As the global crisis gave way to the Great Recession, Canada’s economy suffered the consequences – mainly through a collapse in exports to the United States, which was in a deep recession. Canada lost output amounting to more than 4 per cent of real GDP and job losses equivalent to almost 2 1/2 per cent of our labour force.