Canadian Outlook Long-Term Economic Forecast: 2020

The Conference Board of Canada, 124 pages, February 19, 2020
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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

  • Economic growth is expected to improve from its recent sluggish pace but is unlikely to exceed 2 per cent over the long term.
  • The Canadian economy, after growing by 1.6 per cent in 2019, will expand by 1.8 per cent in 2020.
  • Weak consumer spending has been one of the main areas holding back economic growth over the last year. While consumer spending should accelerate in 2020, high levels of household debt will limit this improvement.
  • The trade sector is also underperforming. Slowing global growth and ongoing trade tensions will prevent a stronger performance in 2020.
  • Beyond 2020, economic growth will be constrained by declining labour force growth and weak business investment.
  • Annual business investment is $50 billion below 2014 levels. There will be a rebound in the coming years, but growth will be slow over the long term.
  • From 2020 to 2040, GDP growth is projected to average just 1.7 per cent.

Table of Contents


Section 1—U.S. outlook

  • Overview
  • Assumptions
  • Aggregate demand

Section 2—Demographics

  • Population aging will continue to drive demographic change
  • Baby boomers in the driver’s seat of demographic change
  • Population aging: Not just Canada
  • Components of population growth

Section 3—Monetary policy

  • Stable inflation to restrain interest rate hikes
  • The goal of monetary policy
  • Adoption of the inflation-control target
  • Monetary policy in the era of price stability
  • Real interest rates
  • Nominal interest rates
  • The Canadian dollar

Section 4—Fiscal policy

  • Overview
  • Federal forecast
  • Provincial outlook
  • Municipal governments

Section 5—Energy

  • Uncertainty continues in Canada’s energy sector
  • Long-term global energy outlook
  • Oil markets
  • Natural gas markets
  • Investment
  • Production
  • Pipelines are make-or-break for trade outlook

Section 6—Labour markets

  • Population aging drives labour market trends
  • More working women—not more kids—are the answer to Canada’s labour force challenges
  • Immigration also helps
  • Labour force growth and participation
  • A detailed look at the household finances of Canadian workers
  • Key labour market outcomes
  • Productivity
  • Natural rate of unemployment
  • The changing shape of work in Canada

Section 7—Potential output

  • Overview
  • Modest growth for potential output
  • Gap closure and its implications

Section 8—Aggregate demand

  • Consumption
  • Housing
  • Business investment
  • Government spending
  • International trade

Appendix A—Forecast tables

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