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Canadian Outlook Long-Term Economic Forecast 2015

The Conference Board of Canada, 140 pages, December 23, 2014
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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

  • Prospects for the United States economy are promising. We expect it to post its fastest annual growth in a decade in 2015 and 2016.
  • Stronger U.S. growth will improve Canada's trade performance and help lift real GDP growth to 2.6 per cent in 2015—a solid improvement over the lethargic pace of the past three years.
  • Beyond 2015, the economy will approach its full capacity and economic growth will be restrained by slowing potential growth.
  • Potential output growth is projected to be considerably slower over the next two decades, held back by the exodus of baby boomers from the labour market.
  • Strong immigration will not reverse Canada's aging trend, but it will help keep total population growth relatively stable, at close to 1 per cent annually. By 2035, Canada's population will reach 43.5 million, up from just over 35.5 million today.
  • Fiscal restraint will continue at both the federal and the provincial level, and the government sector will contribute little to economic growth over the next few years.

Table of Contents

Executive Summary

Chapter 1—U.S. Outlook: Aging of the Baby Boomers Will Lead to Slower Growth

  • Overview
  • Assumptions
  • Potential Output
  • Monetary Policy
  • Aggregate Demand

Chapter 2—Demographics: Demographic Time Bomb Continues to Tick

  • Age Cohorts of the Canadian Population
  • Population Aging—Unstoppable
  • Components of Population Growth

Chapter 3—Monetary Policy: Monetary Stimulus to Be Withdrawn Slowly

  • Overview
  • The Goal of Monetary Policy
  • The Era of Price Stability
  • Real Interest Rates
  • Nominal Interest Rates
  • The Canadian Dollar

Chapter 4—Fiscal Policy: Provincial Governments Struggle but Federal Government Set to Balance Ahead of Schedule

  • Overview
  • Historical Perspective
  • Federal Forecast
  • Provincial Outlook
  • Municipal Governments
  • Canada's Social Safety Net
  • Provinces Need to Slow Health Care Spending
  • Education
  • Social Assistance
  • Public Pension and Old Age
  • Security Programs
  • Employment Insurance

Chapter 5—Energy: Canada's Long-Term Energy Outlook

  • Overview
  • Long-Term Global Energy Outlook
  • Oil Markets
  • Natural Gas Markets
  • Oil Sands Dominate the Investment Landscape
  • Unconventional Resources a Boon to Canadian
  • Natural Gas Industry
  • Conventional Oil Production
  • Trade

Chapter 6—Labour Markets: Labour Market to Tighten Over the Long Term

  • Slackness Remains in the Labour Market …but Not for Long
  • A Weaker Participation Rate and Slowing Population Growth Affecting Trends in the Labour Force
  • Upward Pressure on Wages and Impact on Productivity
  • Productivity Growth Set to Accelerate
  • Natural Rate of Unemployment to Fall Gradually
  • Slower Labour Force Growth Will Constrain Employment Gains

Chapter 7—Potential Output

  • Overview
  • Long-Run Economic Growth to Be Constrained by Slowing
  • Potential Output
  • Gap Closure and Its Implications

Chapter 8—Aggregate Demand

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

Chapter 9—Greenhouse Gas Emissions: GHG Emissions Intensity to Keep Falling, Overall Emissions to Keep Rising

  • Data Sources and Methodology
  • Building the GHG Emission Forecast
  • Total Emissions Forecast to Continue to Grow
  • The Outlook for the Largest Emitters

Forecast Tables

  • Table 1—Key Economic Indicators
  • Table 2—Gross Domestic Product, Expenditure Based, at Market Prices
  • Table 3—Gross Domestic Product, Income Based, at Market Prices
  • Table 4—Sources and Disposition of Income, Households
  • Table 5—Consumption, Households
  • Table 6—Trade
  • Table 7—Sources and Disposition of Income, Corporations
  • Table 8—Prices
  • Table 9—Government Fiscal Positions
  • Table 10—Selected Canadian and U.S. Interest Rates
  • Table 11—Gross Domestic Product

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