Global Trade

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

This platform monitors progress toward a clean energy growth economy. It tracks the movement of indicators under three themes: economy, environment, and society. Since this platform was released in 2021, Canada’s energy transition has come into sharper focus. Environment and Climate Change Canada (ECCC) released the 2030 Emissions Reduction Plan in March 2022, and the Canadian Net-Zero Emissions Accountability Act (CNZEA) was introduced in July 2021.

Online experience  |  8-min read
June 9, 2022
Focus Area—Sustainability

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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. Motor vehicle manufacturing sales, which have been plagued by semiconductor shortages, managed to grow.

Quick take  |  2-min read
January 17, 2022
Focus Area—Canadian Economics

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.

Online experience  |  8-min read
January 6, 2022
Focus Area—Canadian Economics

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
Focus Area—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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

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 | 8-min read
October 14, 2021
Focus Area— Canadian Economics

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 | 8-min read
October 5, 2021
Focus Area— Canadian Economics

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
Focus Area— Canadian Economics

Ninety-nine per cent of plastics are produced from fossil fuels. As Canada and other advanced economies reach for net-zero carbon emissions by 2050, the emissions trajectory of petrochemical plastic producers needs a drastic change of course. With rising plastic pollution globally, this must be complemented by a transition to a circular economy. This dual transition will underpin the future of petrochemical plastic producers. These two elements of transition are complementary, yet distinct. The sustainability of plastics in our material world underscores this point.

Impact paper | 30-min read
August 17, 2021
Focus Area— Sustainability

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
Focus Area—Canadian Economics

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
Focus Area—Canadian Economics

COVID-19’s impact on immigration has been extraordinary. Immigrants who arrived or settled in Canada during the pandemic are distinct from previous groups of permanent residents. Understanding what makes this cohort unique is key to helping us identify their unique assets and tackle the integration challenges they may face. It also helps leaders across the immigration sector plan for the future and offset the negative impacts of the pandemic.

Online experience | 8-min read
May 20, 2021
Focus Area— Immigration

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.

Op-ed  |  4-min read
March 3, 2021
Focus Area—Canadian Economics