Like the United States, Ontario’s economy is “on the brink of recession” in 2008, says Royal Bank of Canada in a report released Thursday morning. The drag on Ontario’s exports will mean that Canada’s biggest province will only eke out 0.8 per cent growth of its gross domestic product this year, the report says.

The outflows also accelerate a trend for investors to put their money either in ultra-safe cash options such as money market funds, or into riskier markets and high-fee products such as hedge funds. They are abandoning the middle ground of mainstream equity and fixed income funds, especially in the developed markets.