Canadian Economics

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

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
May 20, 2022

Despite the rise in case counts from both the Omicron and BA.2 variants early in 2022, most Canadian cities have already seen restrictions loosened or dropped. We expect this to aid in the continued recovery of CMA economies across the country this year. It’s especially good news for the travel and tourism markets in each region, which so far have lagged most other industries in returning to their pre-pandemic levels.

Online experience  |  8-min read
May 20, 2022

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

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

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

This is the third quarter in a row where the Index of Business Confidence has seen a decline. The last time the index experienced three consecutive declines was in 2014. Our latest survey indicates that firms continue to have concerns about the coming six months, especially when it comes to rising costs for capital and labour.

Online experience  |  8-min read
May 6, 2022

From an economic perspective, the war has destroyed Ukraine’s economy and has severely damaged Russia’s as well. However, the war’s impact will not be 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.

Online experience  |  8-min read
May 6, 2022

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

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

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

Russia’s invasion of Ukraine is taking a huge human toll. It has been deeply disturbing to watch unfold. There are many different scenarios for how the war will go over the next few months—some worse than others. Our baseline view is that the Russian army will not extend its war beyond Ukraine’s border and that disruptions to the world supply of natural gas and oil will be limited and temporary.

Online experience  |  8-min read
April 29, 2022

There are four CMAs in the up-up quadrant this month, one more than the previous month. Just over half of the CMAs in this outlook had lower housing starts in March than their three-month moving average. April starts were lower than the six-month moving average in three-quarters of the CMAs.

Online experience  |  8-min read
April 29, 2022

With the economy adding 73,000 jobs in March, Canadians’ share of optimistic views on future job prospects is 24.9 per cent – 1.9 percentage points lower than last month. Overall, Canadians are still confident that more job opportunities will surface in the next six months, although less certain than the previous month.

Online experience  |  8-min read
April 28, 2022

National sales of existing homes fell in March, the largest drop in nine months, but were still the second-highest volume on record for the month, behind only March 2021. The national market remained tight, as listings fell at a similar pace. But Canada’s average resale price fell 1.5 per cent in March, the first monthly decline since July 2021.

Online experience  |  8-min read
April 27, 2022

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

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

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

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

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

The Omicron wave of the COVID-19 pandemic had largely worked its way through the population this winter, and Canadians had been looking forward to life returning to normal. Russia’s invasion of Ukraine, however, threw that hope out the window. While the human tragedies inside Ukraine’s borders make the impacts on Canada and Canadians seem tiny in comparison, the invasion does add plenty of future risks and unknowns to our outlook.

Online experience  |  8-min read
April 14, 2022

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

The Omicron wave of the pandemic has been sharper and much shorter than COVID-19’s other variants. But as the fifth time around since the pandemic started, this wave exposed the breaking point of government policy measures. Vaccinations and, particularly, booster doses did their jobs in containing the outbreak. As frustrating as the anti-COVID measures were, most Canadians supported the latest round of capacity limits and the extensions of vaccine passport rules because they saw these as the quickest way to exit the wave.

Online experience  |  8-min read
April 13, 2022

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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
December 17, 2021

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

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

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  |  8-min read
December 13, 2021

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

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

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

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

As provinces lifted restrictions, Canadians headed outdoors and spent more. Throughout the pandemic, households amassed large amounts of savings thanks to government support measures. But now that the economy is opening up, Canadians are unleashing their savings, pushing economic growth higher.

Quick take  |  2-min read
November 30, 2021

It’s human nature to want to improve things. But sometimes, in trying to make things better, we can end up making them worse. So knowing when to act, and when not to, is often a sign of wisdom. In other words, if it ain’t broke, don’t fix it. And that is what’s needed as the Bank of Canada renews its mandate with the federal government for the next five years.

OP-ED  |  4-min read
November 29, 2021

Over the past year, businesses were understandably telling us that they thought their investment prospects would improve in the six months ahead. However, the optimism is fading, and firms are shifting their focus from the economic recovery to concerns about the pandemic’s fallout.

Quick take  |  2-min read
November 25, 2021

Supply chain disruptions are turning out to be the bane of consumer confidence. The near future doesn’t look too bright as consumers’ optimism is likely to further erode. Canadians are likely to spend less and save more due to the uncertainty surrounding future prices and supply chain disruptions that have no end in sight. Worse still, this is all brewing in the backdrop of a looming pandemic entering an endemic phase.

Quick take  |  2-min read
November 22, 2021

Supply chain disruptions are taking their toll on retail sales by limiting the number of goods retailers can sell. This is particularly evident at automotive dealerships, as the global shortage in semi-conductors has left automakers no choice but to cut production in recent months. The availability of many other goods, such as electronics and appliances, has been hit disproportionally hard by the supply crunch as well.

Quick take  |  2-min read
November 19, 2021

The U.S. economy has recovered from the devastating effects of the pandemic much faster than anticipated, and we expect to see that sometime in the second half of 2021 the gap between potential and actual growth closed.

Online experience  |  8-min read
November 18, 2021

If any good is coming of inflation this year, it’s that the vocabulary of Canadian economists is being refined. We’re now familiar with all the nuances that “permanent,” “transitory,” and “transitory but not short-lived” can imply. Semantics aside, it’s difficult to make the case that inflation is transitory.

Quick take  |  2-min read
November 17, 2021

Digital trade is growing rapidly, and the economic implications are significant. Canada can do three key things to build on our current head start in measuring digital trade. To learn more, access our research.

Video  |  50-second watch
November 17, 2021

You can’t go anywhere these days without hearing about supply chains, bottlenecks, and shortages. These disruptions are making life difficult for many Canadian manufacturers and are unlikely to go away any time soon. Shortages of key inputs and intermediate goods (including semiconductors) and shipping challenges are adding to the delays and slowdowns.

Quick take  |  2-min read
November 15, 2021

After employment surpassed the pre-pandemic level in September, you would be forgiven for thinking the jobs recovery was complete. Based on today’s population, this difference amounts to just over 250,000 jobs. There’s still lots of work to do.

Quick take  |  3-min read
November 5, 2021

Today, the government of Ontario released its fall Economic Outlook and Fiscal Review, with an emphasis on its post-pandemic recovery plan. The economic and fiscal outlook is much improved in comparison to Budget 2021, released in March. The province still forecasts a string of deficits through to 2023-24, but cumulatively, they are nearly $50 billion lower than previously expected.

Quick take  |  3-min read
November 4, 2021

Despite the improvement in the goods trade balance, September’s merchandise trade numbers were largely disappointing, as the trade sector continues to grapple with supply disturbances. The spread of the Delta variant inflamed disruptions to supply chains and continued to take a major toll on some sectors, such as the motor vehicles and parts industry.

Quick take  |  2-min read
November 4, 2021

Real GDP growth unexpectantly turned negative in the second quarter of this year, and early indicators suggested that the third quarter got off to a rocky start. Thanks to the successful rollout of vaccines in most regions of the country, there is still enough momentum in the economy to ensure that growth stays positive in the second half of this year. But the negative quarter led forecasters to pull back on overall gains in GDP.

Online Experience  |  8-min read
November 2, 2021

Following the reopening of the economy, the Canadian consumer wants to spend more. But global supply chain disruptions and labour shortages are creating challenges for firms to meet consumers’ demands. This is driving prices upwards, forcing a lot of Canadians to hold back from spending on large-ticket items.

Quick take  |  3-min read
October 29, 2021

As expected, the Bank reduced its monetary stimulus. But that was the easy part. A more arduous journey lies ahead. Supply chain disruptions are here to stay at least until the summer of next year. These disruptions are not only fanning inflation but also subduing growth.

Quick take  |  3-min read
October 27, 2021

This morning’s release is particularly encouraging for two key reasons. First, retailers are doing well despite facing more tough competition from leisure activities (such as travel and in-person dining) following the loosening of public health restrictions. Second, retail sales grew at a healthy clip despite ongoing supply chain issues, which have hurt the availability of many consumer goods.

Quick take  |  2-min read
October 22, 2021

Pedro Antunes, chief economist at the Conference Board of Canada, joins BNN Bloomberg to discuss Canada's high inflation picture. He notes the spike in CPI data could cause the Bank of Canada to quicker and more aggressively than expected.

BNN Bloomberg  |  8-min listen
October 20, 2021

Our own Sohaib Shahid, PhD joined Steve Paikin’s The Agenda to discuss our wobbly world economy including inflation, gas prices, the markets and the outlook for the Canadian and global economy.

tvo  |  28-min listen
October 20, 2021

September’s inflation print should remind the markets to go beyond the transitory vs persistent debate. Inflation has been above the Bank of Canada’s upper target range of 2 to 3 per cent for half a year. Something is transitory if it doesn’t change behavior. But we are seeing businesses change behavior, for example when it comes to setting higher prices for their goods and services.

Quick take  |  3-min read
October 20, 2021

As new COVID-19 cases dropped, consumer confidence picked up. The improvement in October’s Consumer Confidence Index mainly reflects the uptick in consumers’ confidence in future employment, as more job openings are expected following the economic reopening.

Quick take  |  1-min read
October 18, 2021

A recovering global economy means more demand for Canadian manufacturing products. Sustained growth in primary metal manufacturing (used as an input in construction and many manufacturing subsectors) is indicative of the global recovery underway. Demand for raw and intermediate materials has shot up, driving prices higher.

Quick take  |  2-min read
October 14, 2021

Pedro Antunes spoke with CBC’s Carole MacNeil to discuss the labour market in Canada including the impact of low immigration and government programs such as CRB/EI.

CBC  |  6-min listen
October 12, 2021

September marks the end of the third quarter, during which the labour market added almost 350,000 jobs. A direct result of the reopening of the economy, these gains represent a significant step forward for the labour market. With employment now past its pre-pandemic level, we expect job growth to moderate over the coming months as the economy continues to absorb spare capacity.

Quick take  |  2-min read
October 8, 2021

Canadians enjoyed greater freedom to spend on in-person dining, entertainment, and travel in July. As demand for these services grew, consumers redirected spending away from real estate and goods such as building material, garden supplies and sporting goods.

Quick take  |  2-min read
October 1, 2021

Tourism spending is sensitive to lockdowns. Despite showing some growth, the pandemic’s third wave and stringent restrictions on nonessential domestic travel kept tourism expenditures low during the second quarter. With the border closed and bans on nonessential inbound travel, international visitor expenditures in Canada also remained subdued.

Quick take  |  2-min read
September 29, 2021

Canadians have been enjoying the return of some simple pleasures over the last few months. As the vaccination rate has increased, people have been heading out to patios, booking vacations, and engaging in social activities. This is good news. But every rose has its thorn. Provincial and territorial reopenings have also brought with them a spike in prices.

Op-ed  |  4-min read
September 21, 2021

The decline in September’s Consumer Confidence Index reflects Canadians’ caution in the face of the fourth wave. Concerns over future finances and employment mean that the average Canadian will likely hold back on spending and save more for a rainy day.

Quick Take  |  2-min read
September 20, 2021

The latest inflation data reflect an economy where supply keeps falling short despite robust demand. Several factors, mostly temporary, are pushing up consumer prices. Still, uncertainty surrounding the pandemic means that the persistence and magnitude of these factors are unclear.

Quick Take  |  2-min read
September 20, 2021

Though the job gains in August are a good sign, Canada is still down jobs compared to February 2020. If employment remains subdued, a full economic recovery will take longer than expected. Combined with slower than expected economic growth in the second quarter, that could encourage the Bank of Canada to delay any further tapering to its Quantitative Easing (QE) program next month.

Quick Take  |  2-min read
September 13, 2021

The two-stage approach to tapering and future rate changes are important signals on when the bank believes Canada’s economy is robust enough to operate without the extraordinary monetary stimulus injected so far since the beginning of the pandemic.

Quick Take  |  2-min read
September 9, 2021

No surprises. With less than two weeks to the federal election, the BoC kept rates steady. Weak economic growth, lingering challenges to the labour market, and uncertainty surrounding the pandemic mean that the economy still needs substantial monetary policy support.

Quick take  |  8-min read
September 8, 2021

After two months of negative GDP growth, the economy’s downhill trek ended in June. Accelerated vaccination programs allowed some provinces to relax restrictions. This prompted Canadians to start spending on high-contact services, including indoor dining, travel, and recreation.

Quick take  |  2-min read
August 31, 2021

Sunny days for retail sales are here. An acceleration in vaccination programs in June prompted some (though not all) provinces to ease restrictions. This allowed many Canadians to head out to patios, book vacations and engage in social activities. All of which meant more spending.

Quick take  |  2-min read
August 20, 2021

Transitory or not, inflation is running hot right now. And July’s data confirms that. Whose to blame? Well, a combination of factors including lingering supply chain disruptions, base effects from last year, and greater consumer demand as provinces reopen.

Quick take  |  2-min read
August 18, 2021