Any other country would have revolted by now instead of simply agreeing to pay higher costs for everything:
Prime Minister Justin Trudeau defended his government's economic performance Thursday by touting investments in housing and dental care when asked about new data that shows the economy actually contracted in the last quarter.
Statistics Canada reported this morning that the Canadian economy shrank at an annualized pace of 1.1 per cent in the third quarter — a performance much worse than what some forecasters expected for the July through September period.
In October, the Bank of Canada forecast that the economy would actually grow by roughly 0.8 per cent in that quarter.
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Canada remains a chronic underachiever. Our economy contracted by 1.06 per cent quarter-over-quarter in the third quarter, while the United States economy grew by 5.2 per cent. The European Union and Australia also saw modest economic growth. ...
“Whatever label you slap on this economy, it’s basically not growing, despite the artificial sweetener of rapid population growth,” he told CBC News. “The big picture is that the Canadian economy is struggling to grow, yet managing to just keep its head above recession waters.”
The question is: how does a country with so much potential and a massive resource endowment end up lagging behind its peers? The answer is simple: Canada’s federal government is run by economic neophytes.
On Nov. 21, Finance Minister Chrystia Freeland boasted that, “Canada is now a global investment destination of choice … and the IMF projects Canada to likewise see the strongest economic growth in the G7 next year.”
But the most recent IMF projection is that U.S. GDP will increase by 2.1 per cent in 2023, but Canada’s will only grow by 1.3 per cent.
As for being the “investment destination of choice,” the figures show otherwise. Net foreign direct investment (FDI) plummeted throughout much of the Liberals’ first term. According to figures from the World Population Review, last year, the U.S. led the world, with net FDI inflows of $388 billion, followed by China ($180 billion), Singapore ($141 billion), Hong Kong ($121 billion), France ($105 billion), Brazil ($92 billion), Australia ($67 billion) and Canada ($54 billion).
Canada’s economic prospects are not so rosy, either. In its summary of an IMF report released over the summer, the Fraser Institute noted: “Expanding the population and workforce does increase the size of the economy, but the IMF observes that it’s ‘not a recipe for growing per capita income or living standards.’ And the data show that this is where Canada has been failing short; prosperity on a per-person basis has been stagnant since the mid-2010s.…
“As for Canada’s investment climate, the IMF suggests it has deteriorated relative to comparator jurisdictions. As evidence, the report cites the fact that gross fixed capital formation (a broad measure of investment) puts Canada in the bottom quartile among the 38 countries that are members of the OECD.…
“To explain sluggish Canadian investment, the IMF highlights insufficient product market competition, restrictions on foreign direct investment and government-fostered policy uncertainty that’s hindering new investment in the mining and energy sectors in particular.…
“Since 2017, Canada has lost almost all the business tax advantages it previously enjoyed vis-à-vis the United States, a development that undeniably has made the country a less attractive place to deploy capital than it was a decade ago.”
Worse, Canadian debts are too high, making businesses, governments and consumers vulnerable to higher interest rates. The IMF provides two metrics that explain the problem.
In 2022, Canada’s “Household debt, loans and debt securities” as a proportion of the country’s GDP was the highest in the G7. Canada’s indebtedness was equivalent to 102 per cent of its GDP; the United Kingdom was 83 cent; the U.S. was 74 per cent; Germany was 55 per cent; Italy 42 per cent; France 66 per cent; and Japan was 68 per cent.
The second metric is Canada’s excessive price-to-income ratio, or the median price paid for property compared to average disposable income. In the middle of this year, Canada’s ratio was 9.6, more than double the U.S. ratio of 4.2.
On top of this, excessive government deficits (federal and provincial) hobble Canada’s economy with debt and interest payments. This was foreseen in 2021 when the OECD predicted that Canada will be the worst performing economy for the next decade, and for three decades after that.
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Canada’s labor market is stronger than expected, but most weren’t expecting much. Today’s Statistics Canada (Stat Can) Labor Force Survey (LFS) update shows the economy added more jobs than expected in November. However, the data also revealed more laborers were added than work, boosting unemployment. The trend is seen continuing near-term, with recent immigrants bearing the brunt. Most were struggling to find the relevant work they were sold on at record low unemployment. It doesn’t get easier as competition rises for roles in a downturn.
Canadian employment improved slightly, surpassing analyst expectations. Employment rose 0.1% (+25k) to 20.1 million in November, in contrast with a consensus forecast of 14k jobs. The jobs added failed to meet the 36k laborers the economy added over the same period. This helped push the unemployment rate 0.1 points higher to 5.8%, the highest rate since January 2022. It’s a little different this time, with elevated inflation limiting stimulus. ...
Stat Can made a special note, calling out employment struggles with recent immigrants. There was supposedly a skilled labor gap that was sold as an opportunity to immigrants. However, 6 in 10 recent immigrants struggled to find relevant work over the past 2 years. If they thought it was hard during record low unemployment rates, it’s about to get a lot harder. Banks like CIBC are expecting the erosion in work to continue until mid-2024, when rates are cut.
In the meantime, this presents a potential hiccup in growth for the country. Immigration represents virtually all (98%) of the country’s population growth. The recent boom invited immigrants to address the country’s skilled labor gap. Those opportunities seem to be a lot more scarce than presented.
(Sidebar: who is holding everyone back, Randy?)
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Finance Minister Chrystia Freeland will not release federal research justifying cabinet claims a GST holiday for builders will lower rents. Freeland called it confidential: “The Department of Finance doesn’t have very much respect for elected officials.”**
The federal Phoenix Pay System failure has cost taxpayers $3.5 billion and counting, the highest figure disclosed to date. The expense was reported to the Commons government operations committee: “How could this happen?”
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Thirty-three political aides, appointees and cabinet ministers traveled with Prime Minister Justin Trudeau to a September 19 climate change conference in New York, records show. It followed a budget promise to cut spending on travel this year: “A better tomorrow requires effort.”
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Over the past year, term deposits at Canadian banks have risen more than 40 per cent to a total of $175 billion, said Mendes in his note. According to recent data, Canadians saved 5.1 per cent of their disposable income in the third quarter, higher than the average of 2.4 per cent between 2015 and 2019.
At the same time the volume of household credit is declining. Adjusted for inflation, consumer credit fell by 1 per cent in the year to September, National Bank economists estimate. The last time that happened was in the 1990s recession when the prime rate was 14 per cent.
“Canadians are spending less to save more,” said Mendes. When you take out auto sales, which are catching up after a long supply disruption, retail sales are only 1.2 per cent higher than a year ago, a much slower pace than the average 3.5 per cent growth seen before the pandemic.
Spending looks even worse when Canada’s population surge is taken into consideration. Household per-capita spending in the second quarter was down 1.4 per cent from the year before, the largest decline since the 2008/09 recession aside from the pandemic lockdowns, said Carrie Freestone, an economist at the Royal Bank of Canada.
Meanwhile, south of the border, the consumer is still going strong. Per-person spending in the United States is almost 2 per cent higher than a year ago and well above pre-pandemic levels, said Freestone.
Unlike Canadians, Americans appear more willing to spend their pandemic savings, which have shrunk to 3.5 per cent of gross domestic product from nine per cent at their peak two years ago, she said.
One reason for this is how mortgages work in America. In the U.S. the typical length of a mortgage is 30 years, while in Canada the term is usually five years or less. Early in the pandemic during a mortgage refinancing boom, many U.S. households locked into a low rate that will last decades.
Canadians are not so lucky. A recent report by Royal LePage estimated that over three million Canadians will have to renew their mortgage in the next 18 months, most at significantly higher rates. Nearly three-quarters of those facing this hurdle said they were worried about the financial hit.
Your government hates you and does not want you to make a living:
A federal judge says one of Ottawa’s tax rules punishes farmers who finance their operations by making a living through another job in a ruling in which he lamented having to deny hundreds of thousands of dollars in tax deductions to a doctor who also ran an organic beef farm.
Now, a leading farming industry group is calling on the government to update its law to remove yet another obstacle for people wanting to launch a farm while paying for it with another job.
The carbon tax is a tax on living and it is the reason why people cannot have nice things like food and shelter.
Only an utter moron would defend it:
A Conservative motion demanding the "unelected Senate" immediately pass a bill exempting more farm fuels from carbon pricing has failed, with the Bloc Québécois saying it could not support what it called a Tory intimidation campaign.**
Ontario First Nations leaders are asking the Federal Court to exempt their communities from the federal carbon tax, a policy they call grossly unfair and discriminatory.
The Chiefs of Ontario, which represents more than 130 First Nations in the province, filed for a judicial review on Thursday jointly with Attawapiskat First Nation, a remote Cree community located on the northwestern shores of the James Bay Coast.
The First Nations argue that the imposition of the price on carbon is leaving their communities worse off than others in Canada and breaching the principles of reconciliation.
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Saskatchewan is a honey badger. Saskatchewan - like the honey badger - does what it wants. It doesn't care that some nancy-boy in Ottawa threatens it:
When asked about Saskatchewan saying it won't participate in collecting costs on the price of pollution beginning in January, Prime Minister Justin Trudeau responded by saying that "Canada is a country of the rule of law and we expect all Canadians to follow the law, and that applies to provinces as much as it does to individual citizens."
What will you do, Justin? Threaten some more?
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