Canadian Outlook Long-Term Economic Forecast: 2017

The Conference Board of Canada, December 8, 2016
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This annual economic forecast presents the long-term national outlook. The U.S. economic outlook is presented in a separate section.

Document Highlights

  • The Canadian economy is unlikely to post growth in excess of 2 per cent for the foreseeable future.
  • Business investment continues to lag, harming economic potential in the medium term.
  • Despite the modest economic growth projected over the medium term, the output gap is expected to close by 2019. After that, economic growth will be constrained by weakness in potential output growth.
  • Over the long term, potential output will be limited to annual growth below 2 per cent as the aging of the population puts downward pressure on labour force growth.
  • Immigration will be vital to the Canadian economy over the coming decades, and the vast majority of population growth over the next 20 years will come from net migration.

Table of Contents


Chapter 1 U.S. Outlook

  • Growth Will Slow Gradually Over the Long Term
  • Assumptions
  • Aggregate Demand

Chapter 2 Demographics

  • Aging of Population Heralds Major Changes for Canada’s Economy
  • A Generational Shift
  • Population Aging: A Trend Across the Developed World
  • Components of Population Growth

Chapter 3 Monetary Policy

  • Sluggish Global Recovery Keeps Monetary Policy Stimulative
  • The Goal of Monetary Policy
  • The Era of Price Stability
  • Real Interest Rates
  • Nominal Interest Rates
  • The Canadian Dollar

Chapter 4 Fiscal Policy

  • Federal and Provincial Deficits to Persist for Another Decade
  • Historical Perspective
  • Federal Forecast
  • Provincial Outlook
  • Municipal Governments
  • Canada’s Social Safety Net
  • Health Care Spending Pressures Mount
  • Education
  • Social Assistance
  • Public Pension and Old Age Security Programs
  • Employment Insurance

Chapter 5 Energy

  • Navigating Long-Term Challenges to Capitalize on Growth Opportunities
  • Global Energy Landscape and Canada’s Role
  • Energy Sector’s Long-Term Outlook

Chapter 6 Labour Markets

  • Population Aging Will Drive Slower Labour Force and Employment Growth
  • Labour Force Growth and Participation
  • Wages
  • Productivity
  • Natural Rate of Unemployment

Chapter 7 Potential Output

  • Overview
  • Potential Output Growth Will Be Slow
  • Gap Closure and Its Implications

Chapter 8 Aggregate Demand

  • Consumption
  • Housing
  • Business Investment
  • Government Spending
  • International Trade

Appendix A Forecast Tables

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