It's Just An Economy

I'm sure it will rebound through the power of magic:

The economy is officially slipping into recession, job growth is being utterly swamped by immigration, and disaffected newcomers are fleeing the country in rising numbers.

And this is all happening as the country’s already sky-high rents continue to reach unprecedented new heights.

On Oct. 31, Statistics Canada projected that the economy was set to shrink by 0.1 per cent in the third quarter of 2023. Given that it already shrunk by 0.2 per cent last quarter, this means Canada is already well into six consecutive months of negative growth — the generally accepted definition of “recession.”

Canada is continuing to see meagre job growth. But any new jobs are immediately being overwhelmed by immigration numbers that remain at all-time highs.

An economic update released last month by Statistics Canada estimated that Canada added an average of 40,000 new jobs for each month of 2023. In each of those months, however, the working-age population surged by 78,000 — “almost twice the average increase in employment,” statisticians noted.

This means that in just the first eight months of 2023, Canada added 320,000 jobs, but also added 624,000 people looking for jobs. “With population growth outpacing employment gains, the employment rate … has edged lower,” wrote the statistics agency.

Immigration has been outpacing employment growth for several years now, but never anywhere close to the absurd disparities recorded in 2023.

In 2022, for instance, Canada added a monthly average of 34,000 new jobs against a monthly increase to the working population of just 41,000.

This trend has already manifested itself in some unbelievable scenes in parts of Ontario, with hundreds of workers seen queuing for a chance at a minimum wage retail job.

In Waterloo, Ont., last week, a Dollarama posted a listing for an “assistant team leader” and was swamped with nearly 2,000 applications, according to a screenshot on reddit. In early October, Toronto’s Dufferin Mall held a job fair for seasonal and entry-level retail jobs — and saw lineups of applicants stretch out the door and around the block.

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One in three Canadians say they are living in a household that is experiencing financial hardship, a new Statistics Canada report has found.

Individuals aged 15 and older reported living in households that found it difficult or very difficult to pay for necessary expenses such as transportation, housing, food and clothing throughout the month of October.

The report, released Friday, found that 41.3 per cent of renters were more likely to struggle financially compared with those living in a residence owned by a household member with a mortgage. Financial pressure eased even more for those living with owners without a mortgage.

“While the proportion of people in households finding it either difficult or very difficult to meet financial needs in October 2023 was down slightly compared with the same month a year earlier (35.5%), it remained notably higher than the proportion recorded in October 2020 (20.4%),” the report said.

Among the largest regions in Canada, the highest proportion of people living in financially strapped households was in southern Ontario.

Almost half of respondents in the St. Catharines-Niagara area reported financial hardship at 41.8 per cent. Next was Windsor at 41 per cent, Kitchener-Cambridge-Waterloo at 40.7 per cent, and Toronto at 38.1 per cent. The lowest proportion was in the Quebec City region at 20.5 per cent.

Year-over-year growth in the Consumer Price Index decelerated from a peak of 8.1 per cent in June 2022 to 3.8 per cent in September 2023, the report says, but many Canadians are still feeling a major financial pinch.

“The higher cost of essential goods and services continues to place financial pressures on many households across Canada. In September, for example, increases in the cost of shelter (+6.0%) and food (+5.9%) outpaced annual wage growth (+5.0%),” it said.

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Canadians anxious for lower interest rates, especially those looking to renegotiate their mortgages in the near future, will likely have to wait until the middle of next year for the Bank of Canada to start to cut, CIBC economist Benjamin Tal believes.

“I think they will take their time before they cut interest rates — not before June or July of next year,” Tal told the Financial Post’s Larysa Harapyn in a recent interview. “That’s another way of tightening, just keep high interest rates for longer.”

The Bank of Canada has raised its benchmark lending rate 10 times since March 2022 to a 22-year high of five per cent. The hikes were part of an effort to bring down inflation, which peaked at 8.1 per cent in June 2022 but has since slowed, registering at 3.8 per cent in September.

The central bank has said its goal is to get inflation back down to two per cent, but Tal said he believes the Bank of Canada could start cutting rates before it gets all the way there.

“If they see the trend going down, 2.5, 2.4, 2.3 they will start cutting interest rates,” Tal said Oct. 25. “They realize that there is so much damage happening, especially in the housing market.”

** 

Homes are so costly in Toronto and Vancouver that more buyers are relying on family to meet minimum downpayments, data show. CMHC said Toronto’s share of its insurance portfolio has shrunk by half: ‘Parents and grandparents are playing the CMHC’s role.’

That's nice.

Now, what jobs are waiting for these migrants (many of whom can't wait to leave Canada - probably something to do with the taxes)? What schools for their children? Where will they live?:

Ottawa has frozen its targets for the number of permanentresidents it will welcome to Canada, saying it plans to leave the number admitted to Canada in 2026 at 500,000.

It has also stuck with its target of 485,000 permanent residents for 2024 and said it plans to take action over the next year to recalibrate the number of temporary resident admissions to ensure the amount is sustainable.

The decision not to further increase numbers follows a sharp drop in public support for immigration over the past year, according to recent polling, as Canadians increasingly associate affordability and housing concerns with an influx of newcomers.

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Quebec Premier François Legault announced on Wednesday that his government's immigration target in 2024 would be about 50,000 newcomers, about the same as this year.

But the actual number of immigrants who will be admitted next year will be more than 60,000, according to documents the government tabled in the legislature.

Speaking to reporters in Quebec City, Legault said he didn't want to raise the annual immigration rate because doing so would threaten the French language in the province.

"We chose … to keep the thresholds, so the total number of permanent immigrants accepted per year at 50,000," he said. "We had evaluated the possibility of increasing it to 60,000, but it's important for us, to stop, to reverse the decline of French."

But the 2024 immigration plan tabled Wednesday indicates that the province plans to accept up to 12,000 more immigrants per year than Legault's stated target — to more than 60,000.

 

Quebec (read: the French language) is so important that it will not increase its own numbers but will import them.

Right ... 

Someone who is not an economist is warning Alberta not to withdraw from the Canada Pension Plan, a thing no one asked for:

Federal Finance Minister Chrystia Freeland says if Alberta were to quit the Canada Pension Plan, it would need to launch a "complex and multi-year process" of negotiating international social security agreements to deal with contributors who work abroad.

Freeland listed that effort among other steps she says the Alberta government, as well as the federal government, would need to take if Premier Danielle Smith decides to withdraw the province from the federal retirement plan and set up its own program.

 

Someone actually trusts these guys with money:

Cabinet has not committed to passing a pharmacare bill by year’s end, says Health Minister Mark Holland. He made no mention of a 2022 agreement with New Democrats to pass pharmacare legislation before December 31, 2023: “It’s not something I have committed to.”

**

 A federal contractor paid millions for the ArriveCan app boasted of having pull at the Canada Border Services Agency. Remarks by Kristian Firth, partner with GC Strategies of Woodlawn, Ont., were secretly recorded by a subcontractor and given to the Commons government operations committee: “They’ve got you recorded.”

 

Oh, it gets better:

A Quebec research institute says some of Canada's biggest companies have transferred billions of dollars in profits to Luxembourg to avoid paying domestic taxes.

The research published today by IRIS says 59 Canadian companies - including 33 headquartered in Quebec - transferred some $119.8 billion in net profits to the European low-tax country over a period of about 10 years.

The companies operate in several sectors including finance, natural resources, food and technology, and include big names such as Thomson Reuters, Alimentation Couche-Tard and Saputo Inc.

 

And who let them do that?