TORONTO - Economists from Canada's Big Five banks are expecting little or no growth in the near future - and they warned Monday the domestic economic gloom could become much deeper.

The word "recession" wouldn't describe the deep structural problems affecting everything from the U.S. housing sector to the Canadian oil industry, said Bank of Nova Scotia chief economist Warren Jestin.

"I think you have to invent a new word to describe what we're in now," he said after the banks presented their perspectives at the Economic Club.

"It's being driven through the financial markets into the real economy. All of those things suggest that it's entirely different than what you might expect from a typical recession."

Bank of Montreal economist Doug Porter said commodity prices will continue to take a beating over the next year, dragging Western Canada's economy down with them.

"You're going to be seeing Western Canada come back down to the rest of us with a thud, especially if commodity prices keep doing what they've done in the last three months," he said.

"It's almost as if the markets are pricing in a much harder landing for commodity prices. I think that's reasonable if you don't get some thawing in the credit markets relatively soon."

The early morning meeting in Toronto's Bay Street financial district appeared prescient, beginning shortly before Canada's biggest stock market opened with a startlingly steep fall, dropping almost 1,200 points to its lowest level in three years as commodity prices tumbled.

Porter said the direction of Canada's economy depends on whether the financial-sector troubles in the United States start to settle down.

"At this point, if this kind of volatility keeps up, I think we're looking at a much more serious downturn than the mild recession that most of us are talking about," he said.

"Over the next month, that's what bears watching."

The cautious outlook was echoed by Don Drummond of TD Bank, who said the Canadian economy won't see any growth until late 2009.

Drummond told the Economic Club audience that even at that point there will be only a gradual recovery.

"I think the credit system is going to be mucked up for quite some time, even if it improves somewhat," he said.

Jestin remained on the more optimistic side of the loonie's direction, predicting that it will hold above the 90-cent threshold as it weathers the financial downturn.

"I still think the fundamentals on the Canadian currency - those that initially drove it through parity and kept it quite strong by recent history-are largely intact," he said, pointing out that Canada's trade numbers still look favourable compared to many other developed countries.

Wright held a more pessimistic view on the dollar, predicting it would slide "just under" 90 cents by the end of next year. The loonie was down 1.78 cents to 90.68 cents US Monday morning.

"For Canada, exports are going to be a continued challenge by weakness in the U.S., but we're still relatively bullish on the Canadian economy," he said.

Porter told the audience that it's tough to provide an accurate outlook on the economy when considering the unpredictability of the markets.

"Trying to do a economic forecast in this kind of turmoil is a bit like trying to put a value on your house while the kitchen is on fire," he said.

"You just don't know how long the fire is going to go on for, or how much damage it's going to do."