Features | From Pivot Magazine

Financial crises roundup: a history of the biggest market shocks

From the Great Depression to the Great Recession, here’s a look back at some of the biggest dips in the global economy

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Financial crisis: man with umbrella above graph showing downward trendThe crashes of the past century have had a variety of causes—from drops in worldwide commodity prices to pandemic-induced panic (Getty Images/Virojt Changyencham)


On October 29, 1929, also known as Black Friday, the Toronto Stock Exchange crash signaled Canada’s watershed moment in the Great Depression. One in five Canadians would become dependent on government relief as the world marched towards a global war.

Cause: Widespread drops in world commodity prices and sudden declines in economic demand and credit.

Solution: In 1934, Prime Minister R.B. Bennett passed the Bank of Canada Act in order to centralize the fragmented banking system to regulate credit and currency in the public’s interest. And, like in the U.S., the Second World War helped bolster the country’s economy by increasing government spending and employment rates.

  • Between 1929 and 1939, the Gross National Product of Canada dropped 40%
  • Unemployment at 27%
  • Canadian exports shrank by 50% (1929-1933)
  • GDP (at market prices) - $6,009 (1930) to $4,975 (1932) = 18.83% drop


The decade kicked off with MTV, the advent of personal computers and the most severe recession in Canada since the 1950s.

Cause: The fallout of the 1979 oil crisis which caused a spike in oil prices due to the Iranian Revolution.

Solution: By hiking interest rates, the central bank encouraged recession and job loss to fight inflation.

  • Inflation: Food up 11.4% and Consumer goods up 12.8%
  • Unemployment went from 7.6% (1981) to 11% (1982) and 12% (1983)
  • GDP dropped 3.2% (1982)


A financial crisis so widespread and impactful that even Hollywood told the tale in The Big Short. Its origins could be traced to the bursting of the U.S. housing bubble in 2008, lasting until 2009.

Cause: Sub-prime lending in deregulated banking sectors, mainly in the U.S.

Solution: The government introduced Canada’s Economic Action Plan that pumped more than $63 billion in fiscal stimulus, encouraging growth and boosting jobs.

  • Inflation: Food prices up 8%
  • Consumer Price Index: Down 0.9%
  • Commodity Price Index: $391.92 (monthly BCPI) down from $881.31
  • Unemployment = 6.14% (2008) to 8.34% (2009)
  • GDP dropped 2.93% in 2009


According to the C.D. Howe Institute, the COVID-19 induced recession lasted from March 2020 until 2021, making it the shortest — but deepest — recession since the Great Depression.

Cause: Global pandemic causing the closure of businesses worldwide.

Solution: While still technically in a recovery phase, an initiative that has helped is the digitalization of certain jobs leading to a teleworker boom from February to May 2020, from 16.6% to 32.6%.

  • S&P/TSX Composite Index had its biggest single day drop since 1940 (12.34%)
  • Unemployment up 3.8%
  • Canada GDP at $1.645 billion (down 5.54% from previous year)


Learn more about what a recession really is, and how to invest in a volatile market. Find out how to stay ahead of debt and bankruptcy, and check out CPA Canada's extensive financial literacy resources.