Canada could go into a recession and Ontario is already there, but Quebec should be able to avoid slipping into one, according to the latest forecasts by Desjardins Group economists, released today.

After four straight months of pullbacks, the Canadian economy is at risk, vulnerable to an official recession. This year, it will record a meagre 1% growth, gaining more strength in 2009, at 1.8%.

“With a high dollar, stagnant U.S. economy and stronger international competition, foreign trade is the Canadian economy’s Achilles heel, especially in central-eastern provinces such as Ontario and Quebec.”

Highly dependent on trade with the United States, Ontario is being hurt due to its overexposure to the structural and economic problems facing U.S. automakers. “It now seems clear that Ontario is going through a recession, though only a slight one. Economic growth is expected to reach just 0.5% in 2008, only regaining some steam in 2009, at 1.3%,” says François Dupuis, Desjardins group vp and chief economist.

In Quebec, Desjardins’ economists believe, the tax relief and investment in infrastructure came at the right time to support growth. Quebec’s GDP will match Canada’s pace in 2008, and be just below it in 2009, at 1.7%.