Canadian Economics

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
Focus Area—Canadian Economics

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 21, 2021

Canada’s existing housing markets strengthened last month but remained below the record for September set last year. Still, last month’s volume was the second-busiest September on record. While resale conditions appear to have stabilized, demand remains high and supply low.

Online experience  |  8-min read
October 21, 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
Focus Area—Canadian Economics

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
October 19, 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

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

August’s merchandise trade numbers were encouraging, but much of this was due to higher energy exports. The monthly numbers highlighted the ongoing pandemic-induced challenges that many non-energy sectors have been enduring, with the most prevalent being fractured production processes owing to supply chain disruptions. With the pandemic far from over, the outlook for Canada’s merchandise exports remains on shaky ground.

Quick take  |  2-min read
October 5, 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

With the fourth wave sweeping across Canada, several provinces have postponed further re-openings and implemented new restrictions instead, including the proof-of-vaccination systems and mandatory mask policies. Although these restrictions are not as stringent as those in previous waves, Canadians’ concerns about the future still intensified this month, especially in Ontario, Quebec, and British Columbia.

Online experience  |  8-min read
September 29, 2021

Only two census metropolitan areas (CMAs) this month have positive short- and long-term expectations, three fewer than last month. These are the CMAs in the up-up quadrant. Most CMAs have negative long-term expectations for September—not surprising, given the recent pandemic-fuelled strength in markets across the country.

Online experience  | 8-min read
September 27, 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

Canada’s economic growth will be uncharacteristically robust over the next two years as it rebounds from the severe shutdowns in key sectors of the economy in 2020. The speed of the pandemic-induced decline in the spring of 2020 has been followed by a rapid recovery as restrictions are eased.

Online experience  |  8-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

The world economy has slowly turned the corner this year. Its strong recovery is linked to the massive fiscal and monetary stimulus that was implemented in every region of the world, plus the rollout of vaccines that has resulted in a sharp pullback on restrictions of activity. However, this important milestone does not reflect the pandemic’s damage to world labour markets as some jobs in the services sector may never come back.

Online experience  |  8-min read
August 11, 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

The current U.S. economic recovery is different from any other rebound in recent history. It has been powered by billions of dollars in excess household savings, by firms anxious to take on workers, and by huge fiscal and monetary policy support.

Online experience  |  8-min read
August 5, 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

Canada’s immediate economic prospects have improved since our last long-term update in December 2020, as the rollout of vaccines has boosted business and household confidence. At the same time, labour markets are quickly recovering many of the jobs lost due to the pandemic last year. Overall, we expect real GDP to expand in 2021 and in 2022.

Online experience  |  8-min read
June 15, 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

As national vaccinations started to pick-up in February, real GDP grew by 0.4 per cent month-over-month. With Statistics Canada’s preliminary estimate for growth in March, first quarter output will likely be higher than expected in our most recent national forecast. Yet recent surges in new cases of COVID-19 reversed the loosening of restrictions in many provinces in April. We therefore expect that growth may have cooled off in recent weeks.

Quick take  |  3-min read
April 30, 2021

Tourism and hospitality is one of Ontario’s key economic drivers. In 2019, the sector employed over 620,000 Ontarians and generated nearly $21 billion in labour income. Before the pandemic-related disruptions, employment in the sector had been stable and sustainable. However, Ontario’s labour market is steadily evolving and, for some tourism and hospitality workers, this evolution has led to job losses, and the COVID-19 pandemic has increased and accelerated these pressures.

Impact Paper  |  15-min read
April 23, 2021
Client—Future Skills Centre

Inflation surged due to a strong rebound in consumer prices this March compared to extremely low prices in the year earlier period. Rising oil and housing prices were two of the main contributors to the strength in inflation. Given subdued consumer prices last spring, we expect that inflation will continue to trend above 2.0 per cent in the coming months.

Quick take  |  3-min read
April 21, 2021

Despite a stronger than expected economic performance in the first quarter of 2021, the Bank of Canada held its policy interest rate steady and announced that its weekly net purchases of Government of Canada bonds will be reduced to a target of $3 billion.

Quick take  |  3-min read
April 21, 2021

Finance Minister Chrystia Freeland’s inaugural budget is intended to transform the economy by favouring vaccine rollouts and economic recovery in the near term and focusing on the labour force, green technology, and education over the long-term. While good intentioned, the fiscal roadmap outlined by the Liberal government will come at a cost to Canadians.

Op-ed  |  4-min read
April 20, 2021

Canadian governments, corporate stakeholders, and advocacy organizations sought to use disclosure to accelerate women’s representation. Disclosure is a regulatory approach that requires companies to: (1) disclose the number of women on their boards and (2) disclose the efforts they have made (or not) to increase that representation.

Impact paper  |  30-min read
April 14, 2021

The labour force survey brings news of employment growth across Canada, pushing the unemployment rate to a new low since the onset of the pandemic. Notable employment gains in the retail sector and in Ontario fueled the jobs recovery in March.

Quick take  |  4-min read
April 9, 2021

Amid stricter lockdowns in Ontario and Quebec, Canada’s real GDP managed to post growth in January. With a preliminary estimate of 0.5 per cent growth for February, this suggests that first quarter growth will be stronger than expected in our most recent national forecast.

Quick take  |  4-min read
March 31, 2021

Today’s Statistics Canada release showed that retail sales fell in January, following a decline in December. This drop was almost entirely due to lower retail activity in Ontario and Quebec. In both provinces, January brought curfews, stay-at-home orders, and other restrictions on economic activity. Though many of these restrictions remained in place into February,

Quick take  |  3-min read
March 19, 2021

February’s inflation was up from its year-ago level, thanks to the rapid growth in gasoline and housing prices.As the economy gradually opens and consumer demand rebounds, consumer prices are likely to exceed their year-ago level in the coming months, leading to stronger inflation for the second quarter of 2021.

Quick take  |  2-min read
March 17, 2021

February’s Labour Force Survey brings news of some significant improvements among industries that have suffered greatly over the previous two months, notably retail trade. With the rollout of vaccines underway and a gradual easing of restrictions, this morning’s release marks the restart of the labour market after a difficult couple of months.

Quick take  |  3-min read
March 12, 2021

Real GDP posted a 2.3 per cent gain in the fourth quarter of last year, leaving overall economic activity down 5.4 per cent in 2020—by far Canada’s steepest recession in modern times. While the economy recovered over the second half of 2020, economic activity has again slowed in recent months.

Quick Take  |  4-min read
March 2, 2021