Canada's economy is expected to stay in recession for three quarters this year and contract 0.5 percent annually in 2009, according to forecasts by the independent, non-profit Conference Board of Canada,

The jobless rate is estimated to peak at 8.1 percent.

With the global slumping economy, Canadian export volumes have been decreasing since late 2007. The economy had been, until recently, protected from the slowdown by high commodity prices.

Gross domestic product is seen shrinking 0.9 percent in the fourth quarter of 2008, followed by contractions of 0.5 percent and 0.1 percent in the first and second quarters of this year.

In November, Canadian exports took a 7 percent cut. Three-quarters of its exports go to the United States and weak demand there, combined with falling oil prices have been contributing factors to the fall.

Meanwhile, Canada's trade surplus plunged to an 11 year low.