Canadian Economics

The Conference Board of Canada is the country’s largest private economic analysis and forecasting unit. Key services include medium- and long-term outlooks on the national, provincial/territorial, metropolitan, and industrial economies, as well as custom economic analysis and forecasting. We are here to help leaders cut through the noise and make informed decisions to build the Canada of tomorrow.

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Recent releases

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Consumer Spending Growth Weakens as the Unemployment Rate Rises: Index of Consumer Spending

Consumer spending growth has been trending downward in recent months and continued throughout August. After reaching 99.9 points in the final week of July, the Index of Consumer Spending (ICS) fell for three straight weeks to a new low record during the week of August 14.

Online experience  |  8-min read
September 21, 2022

Canadian Industries are Writing a New Chapter: Industry Lens

As businesses across Canada embark on a new era, there are plenty of bright prospects across several industries in the Canadian economy. But which sectors will come out ahead?

Online experience  |  2-min read
September 21, 2022

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Rising Rates Hit Home: Provincial Outlook

After an extended period in coasting mode, the Bank of Canada has put interest rates in gear and stomped on the accelerator. Along with the US Federal Reserve (the Fed), the Bank’s goal is to bring inflation to heel before it becomes more embedded in the psyche of businesses and consumers. With luck, the two financial institutions have gotten the timing right.

Online experience  |  8-min read
September 21, 2022

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Headline and Core Inflation Drop, but Remain Too High for Comfort

Down a little more, but still a long way to go. Year-over-year CPI growth cooled further in August, but the pace of this deceleration is likely cold comfort for Canadian households and businesses. Prices for services grew amid high demand for travel and tourism. Propelled by higher interest rates, mortgage interest costs also increased.

Quick take  |  3-min read
September 20, 2022

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Manufacturing Sales Down Again in July, but Volumes on the Rise

At long last, supply chain issues are easing. Global shipping costs and delivery times are on the decline. This has contributed to the price of goods manufactured in Canada declining for the third straight month in July, which is the main reason nominal manufacturing sales fell. After an increase last month, volumes ticked up again in July, an encouraging sign that the global factors holding back real manufacturing growth are beginning to dissipate.

Quick take  |  3-min read
September 14, 2022

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Unemployment Rate Rises in August, the First Increase in Seven Months

This week, the overnight rate rose for the fifth time this year. The increase marks the latest move by the Bank of Canada in the battle against inflation. Higher interest rates will cause consumption and investment demand to weaken, which in turn will see firms hire fewer workers. High vacancy rates across the economy may provide a counterweight again job losses; nonetheless, we expect the unemployment rate to rise further in the months ahead.

Quick take  |  2-min read
September 9, 2022

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The Bank of Canada Raises Interest Rates by 75 Basis Points But is Not Done Yet

Interest rates are close to peaking after today’s 75 basis point increase. After several rounds of relatively heavy rate hikes by the Bank, the overnight rate is now 3.25 per cent, which is above the upper range of the Bank’s neutral range (2 to 3 per cent). This means that interest rates above 3 per cent will have a restrictive effect on the economy.

Quick take  |  3-min read
September 7, 2022

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Trade Balance Tightens

The slight decrease in the trade balance should not spark any jitters. The reduction in the trade balance this month is largely driven by the drop in oil prices. The decrease in oil prices over the past couple of months is driven by a few factors.

Quick take  |  3-min read
September 7, 2022

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Modest Second Quarter Growth as Competing Economic Forces Muddy the Waters

Softening gas prices in July have raised hopes that inflation may be peaking. While measures of core inflation have yet to follow suit, inflation expectation are particularly sensitive to changes in fuel prices. And while inflation continues to squeeze household budgets, for governments, it means higher revenues from income, corporate income and sales taxes.

Quick take  |  3-min read
August 31, 2022

Consumer Confidence Creeps Up: Index of Consumer Confidence

An increase in short-term (one-year) inflation expectations signals that consumers are increasingly worried about the immediate future regarding inflation. However, with the decline in the Consumer Price Index (CPI) in July and the continued decrease in gas prices, we are likely to see worries about short-term inflation expectations decrease.

Online experience  |  8-min read
August 30, 2022

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Price Watch: U.S. Outlook

Is the U.S. economy about to slip into recession over the near term? The signs are certainly ominous, as stock markets have been trending downward and consumer confidence has slipped over the past few months. High inflation is closely linked to the pandemic, which disrupted global supply chains; the massive stimulus implemented by the federal government; and the war in Ukraine, which has led to surging prices for commodities like oil and wheat.

Online experience  |  8-min read
August 26, 2022

Positive Expectations Continue to Outweigh Negative for the Short Term: Metropolitan Housing Starts

There are eight CMAs in the Up-Up quandrant this month, up six from last month. Nearly a third of the CMAs still have postive expectations for the short term. The CMAs with the biggest year-over-year percentage decrease in housing starts in July were Saint John, Québec City, Thunder Bay, London, and St. Catharines–Niagara.

Online experience  |  8-min read
August 25, 2022

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Market Downdraft Persists: Metropolitan Resale Snapshot

July’s 5 per cent dip in national existing home sales was the fifth straight monthly drop. It put transactions 27 per cent below July 2021 and 13 per cent below the 10-year average of seasonally adjusted monthly sales. Meanwhile, perhaps unnerved by recent market softness, potential home sellers refrained from marketing their homes, cutting monthly listings by 5 per cent.

Online experience  |  8-min read
August 23, 2022

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Consumer Confidence Creeps Up

An increase in short-term inflation expectations (1 year) signals that consumers are increasingly worried about the immediate future regarding inflation. However, with the decline in the Consumer Price Index (CPI) in July and the continued decrease in gas prices, we are likely to see worries about short-term inflation expectations decrease.

Quick take  |  2-min read
August 22, 2022

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Signs of Slowing CPI Growth in July

Could this be the beginning of the end of our inflationary ascent? Year-over-year growth of Canada’s CPI may be heading in a more positive direction; namely, downward. Gasoline prices fell in July which helped to ease price pressures throughout the economy. The psychological effects of falling fuel prices also bode well for inflation expectation setting. Fluctuations in the price of gas disproportionately influence consumer perceptions of inflation.

Quick take  |  2-min read
August 16, 2022

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Manufacturing Sales Sees Decline in June Led by Petroleum and Coal Products

Over-reliance on the U.S. market could hurt the Canadian auto sector in the long-run. In late July, Canadian automakers were relieved to hear that U.S. lawmakers finally agreed to propose an amendment to the Inflation Reduction Act, which would move away from only providing tax credits to American-made electric vehicles.

Quick take  |  2-min read
August 15, 2022

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Pandemic, Inflation, and War: Assessing the Risk of Recession for Canada

Over the past 30 months, the global and Canadian economies have experienced more dramatic change and volatility, by most measures, than in the prior 30 years. Pandemic, inflation, and war have made prognostications about the future, or the path ahead for the economy, challenging at best. And even as we hope for pandemic waves to settle and the war to end, a return to “normal” may in fact look very different from the pre-pandemic past.

Issue briefing  |  12-min read
August 15, 2022

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A Wing and a Prayer: World Outlook

Before the war in Ukraine began toward the end of February, we expected the global economy to expand this year. The war has added to the inflationary pressures in the world economy that were already in place. Energy and food prices have surged even higher while, at the same time, supply chain disruptions, while easing, remain challenging.

Online experience  |  8-min read
August 11, 2022

Renewed Interest: Canadian Outlook

The pileup of events around the war in Ukraine, continuing supply chain difficulties, and a seemingly never-ending line of Omicron subvariants has pushed prices worldwide beyond central banks’ tolerance levels. Canada is not as far up the inflation ladder as the United States. Canada’s economy suffered the COVID waves more deeply and did not recover as robustly through 2021.

Online experience  |  8-min read
August 9, 2022

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Employment Flat in July as Momentum in the Labour Market Fades

Seeking to bring inflation down the Bank of Canada is raising interest rates. By reducing demand in the economy, higher interest rates are deflationary. As demand for goods and services weakens, hiring among firms is expected to slow. Historically, cycles of tightening monetary policy are associated with a rise in the unemployment rate.

Quick take  |  2-min read
August 5, 2022

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Trade Balance Ticks Higher

With the sailing of the first ship carrying Ukrainian grain (corn) leaving Odesa, global grain prices are forecasted to ease after spike to a record high in March. There are 16 more full ships queued up to depart from Ukraine carrying wheat, sunflower seeds, corn, and sunflower oil. Price impacts will settle but will remain elevated. Improvements in food prices will take time.

Quick take  |  2-min read
August 4, 2022

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Beyond Blue and White Collar: A Skills-Based Approach to Canadian Job Groupings

In Canada’s modern, knowledge-based, and service-centric economy, employers are increasingly thinking about work from a skills perspective. Old-fashioned labels like “blue collar” and “white collar” are no longer relevant. As well, factors such as educational attainment or work experience are only proxies for assessing the skills of workers. This means that we need a more sophisticated way to talk about employment opportunities.

Issue briefing  |  10-min read
August 3, 2022
Partner—Future Skills Centre

Business Confidence Declines for the Fourth Consecutive Quarter: Index of Business Confidence

The last time the index experienced four consecutive declines was during the 2007–08 financial crisis. Our latest survey indicates that firms continue to have concerns about the coming six months, especially when it comes to the rising cost of labour and capital; the shortage of qualified staff; and more recently, interest rate hikes.

Online experience  |  8-min read
August 2, 2022

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Scant Growth in May as Goods Economy Stutters

Both crude oil and gas prices have fallen in recent weeks. Fears of worsening economic conditions have engendered pessimism in financial markets. Flagging consumer confidence signals that Canadians may soon cut back on purchases at gas pumps. As a significant driver of inflation, falling energy prices should provide some relief against the rising cost of living. Yet there remain significant supply challenges, not least the ongoing conflict in Ukraine.

Quick take  |  2-min read
July 29, 2022

The Model of Occupations, Skills and Technology

To help prepare Canadians for the future of work, our researchers and data scientists proudly developed the MOST on behalf of the Future Skills Centre. A sophisticated and data-rich projection tool, the MOST is designed to offer unique insights into the skills that will power Canada’s future labour markets.

Online experience  |  8-min read
July 27, 2022
Partner—Future Skills Centre

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Consumer Confidence Sinks Lower

This month recorded an increase in the short-term (one-year) inflation expectations, with the long-term (three-year) outlook also seeing a modest increase. This signals that consumers are confident that inflation will be tamed in the long-run but remain worried about the immediate future. Inflation expectations are crucial in determining where wages and prices are headed. Consumers are concerned about how much purchasing power they have with their real wages.

Quick take  |  3-min read
July 25, 2022

Local Economies Keep Growing Amid Mounting Risks: Major City Insights

Although the threat of COVID-19 is far from over, the economies of most major cities across Canada are back on track and weathering the storm of soaring inflation, rising interest rates, and—in a number of cities—cooling housing markets. Employment will keep growing this year, particularly in sectors of the economy hardest hit by the pandemic.

Online experience  |  8-min read
July 21, 2022

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From June’s High-Altitude CPI Reading, Will It Be a Soft or Hard Landing?

After 15 months beyond the Bank of Canada’s inflation target range, have we reached the peak? Not just yet. Price growth continued to be broad-based in June. Month-over-month, all CPI categories continued to expand (in seasonally adjusted terms).

Quick take  |  3-min read
July 20, 2022

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Manufacturing Sales Fall Even as Prices Soar

Even on the back of rising prices, nominal manufacturing sales fell in May. In our latest national forecast, manufacturing output growth will slow but is not expected to turn negative this year. But, as recessionary winds blow stronger, the near-term risks to manufacturing sales are tilting to the downside.

Quick take  |  2-min read
July 14, 2022

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Bank of Canada Raises the Policy Rate by 100 Basis Points

If the Bank of Canada does not raise its target inflation rate over the short term, it risks overshooting interest rate hikes and tipping the Canadian economy into a recession. In May, the Consumer Price Index (CPI) inflation rose by an annual rate of 7.7 per cent compared to 6.8 per cent in April. The Bank’s current stance is to bring down inflation to its target rate of 2.0 per cent, a difference of 5.7 percentage points. That is a considerable gap given how rate hikes have already made their impacts felt.

Quick take  |  4-min read
July 13, 2022

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The Index of Business Confidence Declined For the Fourth Straight Time

The last time the Index of Business Confidence declined for the fourth-consecutive time was during the 2007–08 financial crisis. In this latest survey, a question on the likelihood of a recession was included. More than half the respondents believe that the next economic recession in Canada will be between six to twelve months from now.

Quick take  |  4-min read
July 13, 2022

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Employment Slips in June but Labour Market Remains Drum Tight

Amid tight labour market conditions, the employment rate has risen among diverse groups within the population. This includes core-aged male and female indigenous workers living off reserve as well as recently landed immigrants. Similarly, the employment rate among core-aged female workers, stood at 81.3 per cent in June, just shy of the record high recorded in the previous month.

Quick take  |  2-min read
July 11, 2022

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Trade Surplus Rebounds

Supply chains are adjusting to the new normal. The pandemic and its resultant effects on spending patterns and supply chains have altered business’ inventory management and import patterns. The disruptions of normal seasonal buying patterns point to continued swings in trade results in the months ahead.

Quick take  |  2-min read
July 7, 2022

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Minimum Wage: Pulling the Thorns From a Prickly Debate

Minimum wage policies and their effects have long been studied in academic circles. But with social and economic inequality commanding more of the public’s attention these days, the issue has taken on fresher interest. Newer and more granular sources of data have allowed for different analytical techniques and new findings.

Issue briefing  |  7-min read
July 5, 2022

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After a Volatile First Quarter, Growth Decelerates in April

All eyes remain laser-focused on inflation. As the Bank of Canada cranks up interest rates, flagging consumer and business confidence are early signs of an economic slowdown. This would translate into reduced hiring and the prospect of potential job losses. But given the significant unmet labour demand in the economy, the labour market appears well-positioned to absorb job losses and limit the economic cost as interest rates start to bite.

Quick take  |  2-min read
June 30, 2022

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Housing Affordability Requires Attention to Both Supply and Demand

Housing price increases over the past few years severely eroded housing affordability and galvanized national attention. It is essential to remember that, in any market, prices are determined by both supply and demand. This means that while Canada certainly needs more homes, attention must be paid to demand-side questions like who is buying them, how purchasers are paying for them and what buyers are doing with them.

Op-ed  |  4-min read
June 29, 2022

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Boldly Going Where No CPI Has Gone (Since 1983)

Another month, another uncomfortably high inflation reading. Price growth was broad-based across categories, though the usual suspects appeared again in May. Gasoline price increases, for example, remain astoundingly high. This month’s release also included used car price data for the first time and combined with a recent update to the CPI basket likely mechanically increased price growth in May’s published figures..

Quick take  |  3-min read
June 22, 2022

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Increases in Immigration to Help Offset Effects of Population Aging: Canada’s Outlook to 2045

Once the pandemic loosens its grip on Canada and the world, economic growth will slow down sharply from the plus 4.0 per cent increase forecast for 2022 as the economy returns to some state of normalcy. Growth prospects are comparatively weak because the aging of Canada’s population will lead to a slowdown in labour force growth, which will limit consumer and investment spending.

Online experience  |  8-min read
June 21, 2022

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Waning Consumer Confidence Persists

This month recorded a decrease in the long-term (3-year) inflation expectations and an increase in the short-term inflation expectations (1-year). This signals that consumers are more worried about the immediate future regarding inflation and remain relatively confident that inflation will be under control in the long term.

Quick take  |  3-min read
June 20, 2022

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High Prices Lift Canadian Manufacturing Sales in April

The wild waxing and waning of commodity prices continues to impact manufacturing subsectors unequally. High energy prices pushed nominal sales of petroleum and coal products up by 3.7 per cent while sales volumes rose. On balance, after stripping away the impact of rising prices, manufacturing growth in April was mild at best.

Quick take  |  2-min read
June 14, 2022

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Nearing Capacity? Employment Inches Up in May

With job vacancies still sky-high, near-term employment growth will be constrained by the labour supply. The unemployment rate is holding steady at record lows, but the slow growth in employment isn’t for lack of demand. Employment in accommodation and food services is still 14.0 per cent below pre-pandemic levels as firms struggle to find workers.

Quick take  |  3-min read
June 10, 2022

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Trade Data Disappoint

Trade figures disappointed in April. Digging deeper into the data revealed a decrease in exports of energy products. This was the result of planned maintenance shutdowns in April in the Alberta oil sands, particularly for upgraded facilities that produce synthetic crude oil. However, the combined increases in exports of natural gas and coal almost entirely offset the decline in crude oil exports in April.

Quick take  |  2-min read
June 7, 2022

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Under Pressure: Tight Labour Markets Are Driving Major Change

Although wage growth remains below its pre-pandemic peak, it too has begun to accelerate as the final missing piece in the labour market puzzle falls into place. It is true that some individuals have not fully benefited from the recovery. But, in aggregate, Canada’s labour market is the tightest it has been in decades.

Issue briefing  |  9-min read
June 7, 2022

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Bank of Canada Raises Rates Once More As Recession Concerns Grow

A monetary policy-induced economic slowdown is possible if inflation persists. For now, the probability of a recession happening in the near term remains low, judging by tight labour market conditions, terms of trade (the ratio between the price of exports and imports), and recoveries in sectors severely impacted by the pandemic. Still, if the Bank is hyperfocused on reducing inflation with no immediate success, it risks raising rates more than the Canadian economy can handle.

Quick Take  |  2-min read
June 1, 2022

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A Complicated Recovery: Travel Markets Outlook

Tourism in Canada may have reached a turning point. Two years of pandemic malaise have battered the industry, but the fever might finally be lifting. Canada’s doors are opening to visitors from far and wide. Attitudes toward the pandemic are changing. And businesses are hiring in anticipation of better times ahead.

Online experience  |  8-min read
June 1, 2022

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Connecting the Dots: How Recent Trade Agreements Are Regulating the Digital Economy

Connecting the dots between trade agreement commitments and domestic policy is vital in regulating the digital economy in Canada. As Canada moves forward with projects like its Digital Charter, it must reckon with the fact that Canadians’ digital lives are deeply interconnected with foreign actors, entities, and states.

Issue briefing  |  13-min read
May 31, 2022

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Solid First Quarter Growth but Murmurs of a Recession Are Growing

Rising energy prices saw Canada’s terms of trade improve for the second consecutive month. Underpinning the improvement was the continued rise in energy prices, spurred by the invasion of Ukraine by Russia in February. However, persistent supply-side bottlenecks have resulted in some of the highest inflation in decades. The subduing impact of rising interest rates has raised fears of weakening growth and a heightened risk of recession.

Quick Take  |  2-min read
May 31, 2022

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Retail Sales Hold Steady in March as Price Growth Masks Falling Retail Volumes

As restrictions were lifted spending patterns continued to adjust. Unencumbered by restrictions consumers are seizing the opportunity to redirect spending towards services including hospitality, recreation and travel. The rising cost of living will force households to devote a higher share of expenditure towards essential items such as energy and food.

Quick Take  |  2-min read
May 26, 2022

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Consumers Feel the Pinch of Higher Prices

With inflation the highest since January 1991, affordability remains a key concern for consumers. In addition, the re-opening of the hard-hit hospitality sector will likely exacerbate the current inflation fire with increased travel numbers. This is excellent news for businesses that were hit hard during the pandemic but makes sharper price growth within this sector highly likely, especially when coupled with a strong labour market, higher commodity prices, and supply chain disruptions.

Quick Take  |  3-min read
May 20, 2022

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No Signs of Slowing: Year-Over-Year CPI Growth Rises to 6.8 Per Cent in April

Headline inflation figures will likely ease as “base effects” wane this year. Year-over-year inflation slipped outside of the Bank of Canada’s range in April last year, when it reached 3.4 per cent. As inflation has only continued to grow since then, the year-over-year comparisons to last year’s high inflation months will be less extreme. However, monthly price growth is likely to remain strong.

Quick Take  |  2-min read
May 18, 2022

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Manufacturing Sales Up Thanks to Inflation

Manufacturing sales rose yet again, thanks primarily to higher prices. Still, real inventories have also been on an upward trend over the last few months. This shows that some manufacturers have adapted their strategies to the volatility of the supply crunch. But all is not rosy. Rising input costs, increasing labour shortages, and sporadically high rates of absenteeism due to COVID waves in Canada are adding unnecessary strains to an already precarious situation.

Quick take  |  2-min read
May 16, 2022

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Labour Market Runs Out of Steam as Workers Become Increasingly Hard to Find

Employment made minimal gains in April in a sign that the Canadian economy is at full employment, with total employment rising by 15,000 and the unemployment rate inching down to 5.2 per cent. Record low unemployment and sky-high job vacancies have prompted federal and provincial governments to ease regulation on hiring temporary foreign workers.

Quick take  |  2-min read
May 6, 2022

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Imports and Exports Reach Record Highs

Russia’s invasion of Ukraine has shown up in trade numbers. Total trade (exports plus imports) with Russia was $2.8 billion in 2021, representing 0.2 per cent of Canadian trade activity. Meanwhile, total trade with Ukraine in 2021 was $447 million. Therefore, the direct impact of the trade sanctions imposed on Russia should be minimal for Canadian merchandise trade values.

Quick take  |  2-min read
May 4, 2022

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Paving the Way to an Election

Seemingly taking a page from the federal budget’s playbook, this provincial fiscal plan echoed the increased spending and infrastructure themes of its federal counterparts. This de-emphasis on a balanced budget as the critical fiscal target over the next few years allows the province the flexibility to present a more realistic—though still challenging—spending plan that will not detract from the economic recovery.

Quick take  |  5-min read
April 29, 2022

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GDP Rises as Canada Shakes Off the Shadow of Omicron

Savings among Canadian households remain elevated and continue to provide fuel for consumer spending. With restriction stringency across the country now at the lowest level since the pandemic began, consumers are increasingly directing their purchases towards services.

Quick take  |  2-min read
April 29, 2022

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Worries of Canadian Businesses Continue to Escalate

Since the previous survey in February 2022, we have seen the Bank of Canada raise interest rates. The expectation is for the Bank to continue raising rates to get inflation under control. Russia’s invasion of Ukraine has also placed further pressure on global supply chain disruptions and commodity prices. Given these events, another drop in the Index of Business Confidence was more than likely expected.

Quick take  |  3-min read
April 25, 2022

Tall gold buildings
Retail Volumes Fall as Bumpy Ride Continues

Our view is that growth in retail sales will be modest throughout the remainder of 2022. The year is shaping up to be the least stringent in terms of public health restrictions since 2019, encouraging consumers to spend on leisure activities such as travel and entertainment. And with interest rates on the rise to tackle sky-high inflation, households will have to think more carefully before financing big-ticket items.

Quick take  |  2-min read
April 22, 2022

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CPI up 6.7 per cent in March; Bank of Canada’s gloves come off in April

In April, the Bank of Canada switched into high gear and raised its overnight rate by 0.5 per cent (it now sits at 1.0 per cent). The BoC’s rapid moves will reel in domestic sources of price growth and may convince Canadian consumers and businesses that the situation will soon be under control.

Quick take  |  2-min read
April 20, 2022

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Consumer Confidence Climbs Higher Amid Rising Prices

A solid economic recovery from the Omicron variant and the quick rebound in the labour market has boosted economic activity, absorbed economic slack, and encouraged consumer confidence. However, affordability remains a key concern for consumers. Inflationary pressures exacerbated by supply chain disruptions and higher commodity prices undoubtedly affect consumer behaviour and consumption patterns.

Quick take  |  2-min read
April 19, 2022

Girl on her phone in warehouse
Trucks didn’t block manufacturing sales from growing in February

Canadian manufacturing sales managed to grow in February even as horns blared and trucks blocked exports from crossing the Ambassador Bridge in Windsor. Though the blockade lasted less than a week, it did bring some auto production lines to a halt as the cross-border movement of components slowed. Producers found a way to work around this, allowing real motor vehicle manufacturing sales to grow by 25.0 per cent.

Quick take  |  2-min read
April 14, 2022

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With Big Inflation Comes a Big Rate Increase

With rates rising by 50 basis points, it appears that the persistence of inflation was underestimated, leaving the Bank scrambling to raise rates faster than previously expected. The Bank seems to have fallen far behind the curve while inflation expectations continue to climb up. The longer it takes for the Bank to bring down inflation to its 2 per cent target, the higher the chance of workers demanding (even) higher wages and businesses passing on higher costs to consumers (even more).

Quick take  |  3-min read
April 13, 2022

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Unemployment rate reaches record low in March

With the prospect of future lockdowns much diminished, a partial return of workers to offices is underway. However, the pandemic has showcased the feasibility of remote working and many employers are opting for fully or partially remote working arrangements going forward. Amid recruitment challenges and labour scarcity, employers are facing pressure to be flexible and accommodate staff preferences wherever possible.

Quick take  |  2-min read
April 8, 2022

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Big Returns, Big Spend

The federal government benefited from a significant improvement in its fiscal capacity in the short time since the December 14th Economic and Fiscal Update 2021 (EFU 2021). According to Budget 2022, the government’s fiscal position improved by roughly $85.5 billion, over the six-year projection horizon, because of improved revenues and lowered costs. Strong inflation coupled with a commodity price boom has bolstered government revenues.

Commentary  |  12-min read
April 8, 2022

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Trade Surplus Narrows

We expected a noticeable disruption to trade numbers in February. Some border crossings between Canada and the United States were blocked by protesters, inhibiting the regular movement of goods between the two countries. Although exports and imports via these border crossings were affected in February, this shock was not prevalent. The blocked border crossings appear to have had little impact on aggregate trade values. We should see a rebound in the numbers in March.

Quick take  |  3-min read
April 5, 2022

Parliament building
Inflation-proofing the upcoming federal budget

The inflation we are seeing today is a textbook supply and demand story. When too much money chases too few goods, you get inflation. There are several factors behind the rise in inflation, including the government’s massive fiscal spending to fight off the pandemic-induced crisis. But Canada wasn’t the only country that opened its fiscal taps.

Commentary  |  4-min read
April 1, 2022

Tall buildings
Ontario Hopes To Boost Housing Affordability

Ontario’s government has just introduced the “More Homes for Everyone Act”, which it hopes will deter speculators from driving up the cost of housing, protect homebuyers from unfair treatment by developers and accelerate development timelines to get more homes built faster.

Commentary  |  3-min read
March 31, 2022

Two people staring at a paper
Could Inflation’s Surge Lead to Stagflation?

Inflation has surged in Canada after remaining largely dormant since the end of the 2008–09 global recession. In 2020, the COVID-19 pandemic struck, causing demand in the Canadian economy to collapse and holding the increase in consumer prices. However, a combination of factors, including the reopening of the economy, base effects, supply chain disruptions, soaring oil prices, and widespread shortages of semiconductors and other key products, has caused consumer prices to expand at a 4.0 to 5.0 per cent pace since the spring of 2021—well above the Bank of Canada’s upper target range.

Issue briefing  |  16-min read
March 25, 2022

Two workers in an open mine
Surging Demand for Minerals Key to Long-term Growth: Territorial Outlook

After a two-year roller coaster, the territorial economies are trending upward, driven by a bright outlook for many minerals extracted in Canada’s North. The tourism sector will also enjoy a much-needed boost in the short term following the loosening of travel restrictions in Canada and around the globe. And over the next two decades, travel activity in all three territories is poised to grow, as investments in infrastructure and a growing Canadian population drive a greater number of visits to the North.

Online experience  |  8-min read
March 24, 2022

Facing the Sequence of Challenges: Provincial Outlook to 2045

The pandemic is refusing to go away quietly, leaving an indelible mark on short- and long-term prospects for the provincial economies. The rebound in output and employment to their pre-pandemic highs is nearly complete, but the COVID virus’s nasty habit of morphing into new variants is keeping Canada from getting to the next stage—reclaiming lost economic potential.

Online experience  |  8-min read
March 23, 2022

Person paying using a card machine
Consumer Confidence Rebounds Despite Rising Prices

The index stays below 100 for the second month. However, it is important to note that certain regions such as Ontario, British Columbia, and Alberta experienced increased consumer confidence, signaling that there is reason to be optimistic, and the labour market remains upbeat, with most Canadians remaining optimistic that jobs will continue to return six months from now.

Quick take  |  2-min read
March 21, 2022

Woman shopping
Retail Sales Start the Year Off Right. Will It Last?

After a difficult end to 2021, retail sales posted a bounce-back in January. However, much of the increase was due to tighter restrictions on high-contact services such as dining out and entertainment. With fewer options to spend their savings on, consumers redirected their spending to retail goods, a trend we’ve seen throughout the past two years.

Quick take  |  2-min read
March 18, 2022

Woman staring at paper
Economic Impact on Canada of the War in Ukraine

Vladimir Putin’s war is a tragedy that has resulted in thousands of innocent civilian lives lost and millions displaced. Ukrainians and Russians are being killed in battle, and Ukraine’s cities and infrastructure are being turned to rubble. The economic fallout for both countries is devastating, and the effects will be felt globally.

Commentary  |  5-min read
March 17, 2022

Woman staring at paper
February’s CPI figure hits it out of the park

When filling up your gas tank is already an emotionally fraught experience, February’s CPI figure will likely add fuel to Canadian anxieties over their purchasing power. Inflation is top-of-mind for many Canadians and households report that they are changing their spending habits (buying less meat and opting for cheaper brands, for example) in the wake of rising prices. Scheduled dairy price increases added to food bills in February.

Quick take  |  2-min read
March 16, 2022

Woman at ATM
More sales, more problems for manufacturers in January

In January, manufacturing sales inched upward on the back of higher prices. However, real sales volumes fell as producers dealt with higher levels of absenteeism due to the Omicron wave. As the pandemic recedes again, COVID-19 should present less of a problem for production. But manufacturers are still struggling with worker shortages in an increasingly tight labour market.

Quick take  |  2-min read
March 15, 2022

Blue and yellow ribbon
Impact of War on Global Economy Extends Beyond Russia-Ukraine Borders

Russia’s invasion of Ukraine has been deeply disturbing and has had a tragic effect on the people in Ukraine. From an economic perspective, the war has destroyed Ukraine’s economy and much of its infrastructure. The war costs and international sanctions have severely damaged Russia’s as well but the impacts are not confined to these countries. The conflict has added new risks to a world economy that was already struggling with rising inflation, bottlenecks in supply chains and the lingering effects from the pandemic.

Quick take  |  5-min read
March 15, 2022

Person holding bag of fruit
Labour market storms back to growth in February

In February the Canadian economy added 337,000 jobs, offsetting the losses in January by a wide margin, with labour force participation rates rising 65.4 per cent and the unemployment rate dropping 5.5 per cent. The easing of restrictions, introduced to combat the Omicron variant, underpinned the expansion in employment this month.

Quick take  |  3-min read
March 11, 2022

Bow of container ship at sea
Trade Balance Slowly Bouncing Back

The Russia Ukraine conflict is an increasing worry globally, and Canada has responded to the situation in Ukraine by imposing further restrictions on trade with Russia. However, the effect on Canada’s direct trade with both nations will be minimal. In 2021, imports from Russia totaled $2.1 billion, making up 0.3 per cent of all Canadian imports, while exports to Russia on a customs basis amounted to $657 million, representing 0.1 per cent of Canada's total merchandise exports to the world.

Quick take  |  3-min read
March 8, 2022

Woman typing on laptop
Bank of Canada raises rates amidst geopolitical tensions

The rate hike finally came! And it had to be done. However, the impact this has on Canadian households will be evident soon. Canadians have some of the highest debt levels per household among Western countries (owe $1.77 for every dollar they earn). As such, any incremental increase in rates, while necessary, will squeeze leveraged Canadian households.

Quick take  |  2-min read
March 2, 2022

Woman putting sticky notes on board
Economic Cost of Skills Vacancies

When an employer wants to fill a vacant job, they are really looking for a set of skills to help them complete specific tasks. Until that employer can recruit a new employee, they don’t have access to the skills they need. So job vacancies can actually be thought of as skill-set vacancies: an unmet need for particular skills.

Online experience  |  8-min read
March 2, 2022

Ukraine flag
A Bear Unleashed

The shock of Russia’s invasion of Ukraine has upended conditions far and wide. What people had hoped was only bluster and brinksmanship from Vladimir Putin quickly turned into the unthinkable when his troops crossed the border on February 24. The tragedies the Ukrainian population are having to endure are difficult for outsiders to comprehend. The international community quickly slapped sanctions on key elements of the Russian economy, but their effects so far pale in comparison with the direct human costs within Ukraine’s borders.

Commentary  |  4-min read
March 1, 2022

Hand holding smartphone
Imperilled by Inflation, COVID-19 and Conflict, the Economic Recovery Continues

December concludes a volatile year for the Canadian economy. Despite multiple pandemic waves and extreme climate events, Canada added over 850,000 jobs and administered over 70 million vaccine doses.Although several thorny challenges have emerged, including inflation, supply chain disruptions, and labour market friction, the latest GDP numbers portray an economy in recovery.

Quick take  |  3-min read
March 1, 2022

Person checking out
Rising Prices Stifle Canadians’ Confidence

The index dipped below 100 for the first time in nine months. Still, it is important to note that certain regions such as Quebec, Saskatchewan and Manitoba experienced a slight uptick, hinting that not all is dark and gloomy. In fact, most Canadians are optimistic that jobs will return six months from now, despite the lingering government restrictions and vaccine mandates.

Quick take  |  2-min read
February 22, 2022

Reopenings promise short-term comfort, but inflation stalks retailers’ margins

After a rough end to 2021 that spilled over into January, we expect the road ahead to be smoother. Many provinces initiated reopenings in early February, and most have already lifted capacity restrictions on retailers. Quebec’s retailers, for example, welcomed the recent news that vaccine passports were no longer mandatory to enter big box stores.

Quick take  |  2-min read
February 18, 2022

Person at ATM
Sales growth in December ends a difficult year for Canadian manufacturers

Modest growth in December despite flooding in British Columbia brought a turbulent year for Canadian manufacturers to a close. Still, plenty of challenges lie ahead for the manufacturing sector. Although sales expanded month-over-month, the spread of the Omicron variant began to slow production in the final weeks of 2021.

Quick take  |  2-min read
February 16, 2022

girl looking at a paper
Discussed always and everywhere nowadays, inflation climbs in January

The pandemic isn’t done with us yet, nor is high inflation. Reimposed restrictions following the spread of Omicron have kept demand concentrated on select components of the CPI. Stuck at home, consumers continue to spend on goods rather than services.

Quick take  |  2-min read
February 16, 2022

Person paying by card
Canadian businesses have a lot to worry about

Business optimism continues to fade. Most businesses surveyed don’t think that economic conditions will improve in Canada over the next six months. Companies are attributing their weaker outlook to rising wage demands, labour shortages, increasing cost of capital, and a withdrawal of government support measures.

Quick take  |  3-min read
February 8, 2022

Man looking at phone
Trade Balance Takes a Step Back Amidst Omicron Concerns

Canada’s trade – both exports and imports – made a comeback last year, thanks to eased restrictions in most parts of the world. What’s more, despite the drop in exports in December, the previous quarter finished strong, with Canada's merchandise exports up 7.1 per cent compared to the previous quarter.

Quick take  |  2-min read
February 8, 2022

Masked waitress handing over paper cup
Omicron strikes the labour market

The arrival of the Omicron variant in Canada and the restrictions that followed have again set back the labour market in an all-too-familiar chain of events. As we have seen before, industries that are unable to relocate workers remotely bear the brunt of job losses, meaning low-wage, high-contact services tend to be the worst-affected..

Quick take  |  3-min read
February 4, 2022

Parliament buildings
November GDP: A milestone reached but the storm is building

November brings positive news for several of the worst-affected industries, such as accommodation and food services. Yet dark clouds loom on the horizon. The reintroduction of restrictions across Canada will weaken output and employment in several high-contact services.

Quick take  |  3-min read
February 1, 2022

Skyscrapers
Bank of Canada keeps rates steady but a hike in March is all but certain

The Bank of Canada’s decision to keep interest rates unchanged came as a surprise to the market. But it didn’t surprise us. It is indeed true that inflation has been above the Bank’s upper target rate for nine months. Besides, there is little slack left to absorb in the labour market. Both employment levels, hours worked, and vacancies exceed pre-pandemic levels. What’s more, the level of economic activity in Canada is hovering around full production capacity.

Quick take  |  2-min read
January 26, 2022

Canadian Bilateral Trade Forecast

The Canadian Bilateral Trade Forecast, is a five-year forecast for Canadian exports and imports for a selection of trading partners and products. It is available both in nominal and real (price-adjusted) terms, for which the base year is 2012.

Online experience  |  8-min read
January 24, 2022

Person paying by card
Retail sales boom but Omicron spoils the party

The Omicron variant swept through the country before the holidays, with most provinces seeing record high cases and hospitalizations. This forced many provinces to impose stricter restrictions, with the common denominator being limited customer capacity for retailers.

Quick take  |  2-min read
January 21, 2022

Woman smiling at computer
Canada’s CPI ended 2021 on a high note

From boardrooms to living rooms, inflation remains the topic du jour. December’s CPI figures make that unlikely to change any time soon. Inflation has now been above Bank of Canada’s upper target range of three per cent for nine months.

Quick take  |  2-min read
January 19, 2022

Woman at ATM
Consumer Confidence Retreats Amidst Omicron Concerns

With new lockdown measures imposed this month, and COVID-19 cases and hospitalizations on the rise, it comes as no surprise that the Canadian consumer feels less confident. Future optimism might further erode as consumers spend less and save more due to the uncertainty facing future prices.

Quick take  |  2-min read
January 17, 2022

Cars being built on assembly line
Knee-deep in water, manufacturers shift into high gear in November

Flooding in British Columbia led to material shortages and transportation issues for several manufacturers in November, and many supply chain currents are still flowing against the industry. Yet, activity in the sector continued to grow.

Quick take  |  2-min read
January 17, 2022

Woman looking at clothes
Job growth slows and roadblocks lie ahead

Long-term unemployment fell for the second straight month in December, before which the rate had been relatively constant since August. This at least partially reflects the withdrawal of the Canada Recovery Benefit (CRB) in favour of more targeted financial support.

Quick take  |  2-min read
January 7, 2022

trade ship
Exports on the rise despite flooding in British Columbia

Despite disruptions caused by flooding and landslides in British Columbia, exports and imports increased. Still, the overall growth in trade figures masks the hit British Columbia took. British Columbia’s goods exports fell while exports from other provinces were up.

Quick take  |  2-min read
January 6, 2022

Welder at work
Economy soared in October (before anyone had heard of Omicron)

Sparks flew in October as Canada’s production lines picked up the pace. Economic expansion was driven primarily by stronger manufacturing output with real GDP growing by 0.8 per cent, following 0.2 per cent growth in September.

Quick take  |  2-min read
December 23, 2021

Woman holding a credit card
Retail Sales Rise, but Dark Clouds are Lurking During the Holiday Season

Retailers joined manufacturers by posting a healthy gain in sales in October, making it tempting to believe that the supply crunch is getting better. But today’s release is not as positive as it may seem. In volume terms, retail sales are roughly in line with where they were in August, and sales at motor vehicle and parts dealers remain below levels from much of this year.

Quick take  |  3-min read
December 21, 2021

Woman staring at papers
Canadian consumers less confident this holiday season

The last thing Canadians wanted during the holiday season was Omicron disrupting their plans. The new variant is creating an uncertain environment and dampening consumers’ optimism. Depending on the severity of infections and hospitalizations, we could see a further decline in consumer confidence in the coming months until booster shoots become more widely available.

Quick take  |  2-min read
December 20, 2021

Person paying by card
Towering inflation in November casts a shadow on recovery

November’s inflation figures may have been expected, but that doesn’t make them easier to digest. Prices rose across all major CPI categories. Supply chain disruptions remain one of the key drivers of price growth. Still, there is no denying that government spending has played a role in fuelling demand. Fiscal discipline is warranted in keeping higher prices at bay.

Quick take  |  2-min read
December 15, 2021

building
Manufacturing Sales Show Signs of Life

Transportation equipment continues to be the engine that drives manufacturing sales. Supply chain disruptions have been hurting production across all manufacturing segments, but automakers are feeling the brunt of them. While this morning’s release signals that supply bottlenecks are improving, manufacturers are not out of the woods yet.

Quick take  |  2-min read
December 15, 2021

men working
Measuring Digital Trade

The digital economy is growing. Thanks to technological advancements in international trade, businesses and consumers have increasingly turned online for purchases, and the demand for digital services—has gone up. There is widespread agreement that digital trade’s contribution to the Canadian economy is increasing, and that international trade is growing. But classifying and measuring the opportunities and challenges of digital trade is difficult.

Online experience  |  8-min read
December 10, 2021

Bank of Canada caught between a rock and a hard place

Economic data are giving the Bank of Canada mixed signals. Supply chain disruptions continue to hamper the Canadian economy’s recovery, and the output gap is nowhere near closing. The latest GDP data show that output is still roughly 1.5 per cent below its level in the final quarter of 2019. Meanwhile, the labour market tells a different story.

Online experience  |  2-min read
December 8, 2021

Loaded container ship on the ocean
Exports defy supply chain disruptions

With the fifth consecutive month of surplus under its belt, Canada’s international trade has started off the fourth quarter on solid footing. Still, looking under the hood reveals that not all is well. In October, export growth continued to be volatile and was skewed towards motor vehicles and energy products. The two industries combined accounted for almost 80 per cent of total export growth.

Quick take  |  2-min read
December 7, 2021

bag of fruit
Healthy job growth in November but the spectre of Omicron looms

The Canadian Recovery Benefit came to an end in October and was replaced with more targeted measures. The removal of this financial support comes after employment recovered to above the pre-pandemic level in September. Over recent months concerns were raised that measures such as the CRB were disincentivizing the return of workers to employment.

Quick take  |  3-min read
December 3, 2021

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