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<\/a><\/p>\nPhoto:\u00a0VanveenJF<\/a>\/Unsplash<\/a><\/em><\/p>\n If a recession sweeps through North America, Canada would be hit harder than the US this time around \u2014 and it\u2019s partly because of the economy\u2019s overreliance on the housing market.<\/p>\n So suggests Eric Lascelles, chief economist for RBC Global Asset Management, in a #MacroMemo, his series of weekly dispatches on economic news.<\/p>\n \u201cWere Canadian home prices, resale activity and housing starts to all decline simultaneously and significantly \u2014 as they sometimes do during recessions \u2014 that would weigh heavily on the Canadian economy in a way the U.S. would not experience,” Lascelles writes.<\/p>\n\n That would be a reversal of what happened in the wake of the 2008 Financial Crisis and subsequent recession.<\/p>\n While a subprime mortgage market collapse brought the US housing market \u2014 and broader economy \u2014 to its knees, Canada\u2019s more stringent regulations are credited with helping the country emerge relatively unscathed.<\/p>\n \u201cCanada\u2019s housing boom continued for another decade, due in significant part to the ultra-low rates brought about by the financial crisis itself,\u201d Lascelles explains.<\/p>\n That growth has resulted in housing activity accounting for close to 22 percent of Canada\u2019s GDP, whereas the historical norm is 19 percent.<\/p>\n \u201cIn contrast, the U.S. housing market is currently a smaller share than normal of its economy,\u201d he continues.<\/p>\n Meantime, Canadian households are more highly leveraged than their neighbours to the south.<\/p>\n The debt-to-income ratio in Canada has been trending higher, while stateside it is easing.<\/p>\n