Late Wednesday, Finance Minister Jim Flaherty acknowledged that Canada "is being affected" by the volatility in global financial markets, although he said Canada is weathering the storm better than others.

"The Bank of Canada has taken action to ensure the liquidity of the banking system, and indicated that it stands ready to provide further liquidity to Canadian markets as required," he said in a statement.

"I would emphasize that Canada's banking and insurance industries are well capitalized and our financial system is sound."

His words were a departure in tone from Prime Minister Stephen Harper's reassurance Monday that the worst is over for the economy and that if Canada were going to experience a recession, it would have already happened.

Not so fast, say economists. The collapse or bail-out of three Wall Street titans this week and the sharp sell-off in global stock markets - including Canada's - has the potential to make the second half of 2008 even worse than the first. More...