Canadian Economics

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

With the worst of wave four of the pandemic behind us, people and governments can finally start applying more long-term thinking to their plans. Vaccine mandates have generally replaced occupancy limits as the chief set of COVID-control measures, which is allowing larger groups of people to carry on leisure and business activities.

Online experience  |  8-min read
December 6, 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  |  2-min read
December 3, 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

The easing of border restrictions in November has been an important milestone in Canada’s economic recovery. However, supply chain disruptions and sky-high prices are acting as a dampener. After a relatively optimistic October, Canadians are now starting to worry more about the future.

Online experience  |  8-min read
December 3, 2021

Canada’s existing housing sales rose in October to hit a six-month high. Resale conditions appear to have regained last spring’s strength—October’s volume jump was the largest since July 2020. Strong housing demand continues pick up any gains in supply, thanks to low interest rates.

Online experience  |  8-min read
December 2, 2021

For the second month in a row, only one census metropolitan area (CMA) is in the up-up expectations quadrant. Toronto remains the only city to have positive short- and long-term expectations.

Online experience  | 8-min read
December 2, 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 1, 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

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
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

Prospects for the U.S. economy are generally bright. Still, there will be some hurdles to overcome over the next few months. The solid growth should enable the economy to return to full employment by the end of next year or early in 2023.

Online experience  |  8-min read
November 3, 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

After 2020’s devastating drop in economic activity, the global economy is now expanding at a healthy clip. But the recovery has been—and will continue to be—uneven. The path of the pandemic and differing policy support measures among the major economies, as well as vast differences in vaccine coverage, have resulted in increasing divergence among the world’s largest economies.

Online experience  |  8-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

The Canadian economy contracted in the second quarter, due largely to a sharp downturn in real exports. The downshift has forced us to chop our forecast for real GDP growth in 2021. Quarterly growth will fall back for annual rates through to the middle of next year, as the economy picks up the remaining slack left by the recession.

Online experience  |  8-min read
October 25, 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

As vaccination rates across Canada increase and restrictions decrease, the economy and labour markets of many cities will continue to pick up steam. But the spectre of a fourth wave of the pandemic looms over this optimism. Municipalities and provinces will need to heed the lessons they’ve learned from previous waves to balance growth and public safety.

Online experience  |  8-min read
October 15, 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

The provinces’ long-term economic outlooks depend a great deal on demographics—and international migration. Natural resources will still be important, but a transition away from hydrocarbons will call on industrial investment to step up in transforming the economy. Aging populations will challenge provincial public finances in two major ways: Greater healthcare expenditures and shrinking employment-driven tax revenues.

Online experience  |  5-min read
October 13, 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

COVID-19 has been the worst industry crisis since the advent of global tourism in the 1950s. It will take years to climb back to its pre-pandemic glory, but there are encouraging signs for Canadian tourism in the months ahead. With nearly half of Canadians are fully vaccinated. Canada’s economic recovery is also in full swing.

Online experience  |  8-min read
October 4, 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

The steam is fading. After public health restrictions were eased around many parts of the country in June, retailers naturally saw a boost to their sales. However, as restrictions continued to ease in July, many Canadians decided to spend on leisure activities such as travel and dining rather than on retail goods.

Quick take  |  2-min read
September 23, 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

Confidence continued to surge in The Conference Board of Canada’s latest survey of business leaders. Since falling to historic lows in 2020, business confidence has kept rising, and has now reached its highest level since 2006. Our survey results indicate that businesses believe the pandemic will soon be a thing of the past, and that firms are ready to ramp up their capital expenditures in the near term.

Online experience  |  8-min read
August 16, 2021

Reopen and jobs will grow. That’s the mantra the labour market has followed. The labour market recovery is now at its most advanced stage since the pandemic’s onset. However, not all is fine and dandy. While July’s fall in the unemployment rate is of course welcome, the share of the unemployed who have been out of work for 27 weeks or more still account for almost 30 per cent of total unemployment.

Quick take  |  2-min read
August 6, 2021

Inflation slipped in June, partly due to a reweighting of the basket of consumer goods. The growth of gasoline prices is slowing and prices on food and clothing are cooling too. Elevated housing prices, however, continued to be the main upward contributor to last month’s inflation. We expect that inflation will trend around 3 per cent for the rest of 2021, as a result of ongoing supply shortage issues and increasing consumer demand.

Quick take  |  2-min read
July 28, 2021

The sharp rebound in economic growth this year will be led by all sectors of the economy, including consumers, business investment, government spending, and international trade. The housing sector will provide the largest boost to the economy. Due to rock-bottom interest rates and the desire for larger dwellings in less-populated parts of the country, housing markets shrugged off the effects of the pandemic last year as starts increased from 209,000 in 2019 to 218,000.

Online experience  |  8-min read
July 26, 2021

Today’s announcement from the Bank of Canada reflects its confidence in the strength of the Canadian economy. Holding policy interest rate steady, while reducing weekly net purchases of federal bonds, is an important step in our economic recovery. We anticipate CPI inflation to remain before easing next year, while the Bank is expected to keep interest rates steady until the 2 per cent inflation target is sustainably achieved.

Quick take  | 2-min read
July 14, 2021

As economic restrictions across much of Canada began to ease, the labour market responded with solid employment gains concentrated in sectors where the restrictions have been most punishing. Improvements in several high-contact service industries drove growth in part-time employment and provided welcome job growth among young and female workers.

Quick take  |  3-min read
July 9, 2021

April saw the first monthly contraction in real GDP since last year’s decline at the outset of the pandemic. Output fell, month-over-month. Statistics Canada expects output to drop in May. We anticipate that many of the hardest-hit sectors will show a bounce back in June, with our latest national forecast calling for growth in real GDP in the second quarter.

Quick take  | 3-min read
June 30, 2021

There are reasons to be optimistic as the territories emerge into a post-COVID-19 world. As the global economy bounces back over the coming years, so too will demand for commodities produced in Nunavut, the Northwest Territories, and Yukon.

Online experience  |  8-min read
June 28, 2021

Today’s Statistics Canada release showed that retail sales fell in April, posting their first decline since December of last year. With provincial governments implementing more stringent lockdown measures throughout the month, the results are hardly surprising. And given that restrictions mostly remained in place during May, most retailers have endured a difficult spring.

Quick take  |  3-min read
June 23, 2021

Inflation accelerated again in May, due mainly to “base effects” on gasoline prices which recovered from the plunge last spring. Higher prices for consumer goods, including cars, new homes and food also contributed to the strong inflation figure last month. Going forward, we expect strong consumer spending coupled with supply shortages will keep inflation hot for the rest of 2021.

Quick take  | 2-min read
June 16, 2021

Mario Toneguzzi’s guest on Business Insider: Pedro Antunes, Chief Economist with The Conference Board of Canada, discusses the latest economic forecast for Alberta and the country.

Calgary Business  |  8-min listen
June 9, 2021

The Bank of Canada held its policy interest rate steady while continuing its weekly net purchases of Government of Canada bonds with a target of $3 billion per week. CPI inflation is around the top of the 1-3 per cent target range but the Bank expects that to ease in the second half of the year.

Quick Take  |  2-min read
June 9, 2021

The employment declines captured in May’s labour force survey results reflect the lingering impact of the third wave of the pandemic in Canada. However, the severity of the losses is reduced compared to the previous month indicating the peak of the wave has passed.

Quick take  |  3-min read
June 4, 2021

Following two months of solid gains, real GDP rose in March, posting a monthly gain of 1.1 per cent. Overall, the economy forged ahead in the first quarter of the year, supported by strong household and government spending, residential construction and growth in exports. The growth in March is a testament to the resilience of the Canadian economy to perform well when pandemic measures are eased.

Quick take  | 4-min read
June 2, 2021

In 2020, Canada’s real exports plunged, as the global pandemic led to a collapse in demand from all of its major trading partners. The recovery in the global economy, attributable to the widespread distribution of vaccines and a reopening of economies, will help Canada’s exports rebound growth this year and in 2022.

Impact paper  |  24-min read
May 27, 2021

Inflation spiked in April, due mainly to a rebound in oil prices in the past 12 months as well as the surge in new home prices. We expect that inflation will remain hot in May given the plunge in prices that occurred in the early stage of the pandemic last year. A recovery in global demand for resources and strengthening consumer spending at home, will be the main contributors to inflation going forward.

Quick take  | 3-min read
May 19, 2021

The results from March’s Survey of Manufacturing brings signs of progress across a sector that has suffered in the wake of economic restrictions, delays in global shipping and shortages of key production inputs over the preceding months.

Quick take  | 3-min read
May 14, 2021

April’s Labour Force Survey shows the impact that tightening COVID-19 measures are having on employment in Canada. The third wave of the pandemic dealt a heavy blow to jobs in Ontario, with schools and stores forced to close. However, with the rollout of vaccines underway, we expect employment to bounce back as we have seen in the past once restrictions are eased.

Quick take  | 3-min read
May 7, 2021

Toronto’s financial centre is vital to the Canadian economy—providing jobs, growing GDP, and supporting small and medium-sized enterprises during the pandemic. Total employment in Toronto’s financial sector is ranked second in North America and eighth globally.

Online experience  |  8-min read
May 4, 2021