The Canadian economy seems to be slowing down after some very notable growth in the first two months of 2019.
According to the Canadian Press, “the economy shed 7,200 jobs in March.”
Economists had expected at least a net gain of 1000 positions.
Looking deeper at Statistics Canada’s March Labour Survey, the net losses came as a result of more people were working in the “finance, insurance, real estate, rental and leasing industry, and in public administration.” While employment notably dropped in “health care and social assistance; in business, building and other support services; and in accommodation and food services.”
The report shows an economy growing in an ultimately sluggish fashion mainly in defiance of large scale obstacles placed in its way, as provinces such as Alberta continue to struggle when it comes to regaining their former economic glory. This laggard growth is not surprising when you factor in the financial loss the nation has suffered due to poorly placed energy policies.
According to an article by Nelson Bennet, citing a report by the C.D Howe Institute, “in just two years, under the Justin Trudeau government’s watch, $100 billion worth of energy projects were killed, cancelled or stalled”
“That is equivalent to 4.5% of Canada’s gross domestic product.”
While that investment loss is notable, the problem goes far deeper than just the energy sector.
According to some, the entire Canadian economy has been hampered from both Canadian laws, and foreign involvement. At the local level, outside of our over-regulated policies resource development, Canada’s tax system may be making us uncompetitive, according to the Fraser Institute.
Jamie Golembrek points out in the Financial times that the Institute found that at “incomes of $50,000, $150,000 and $300,000, among all 61 provinces and states in Canada and the U.S., the ten highest combined personal marginal income tax rates are in the ten Canadian provinces.”
At the international level, we have also handily suffered as a result of global instability, much of which the federal government has had direct negative involvement. For examples, the nation has fallen out with some of its closest allies and trading partners including Saudi Arabia, the United States, and China, noticeably harming our economy, without much… if anything to show for it.
With so much going on, it will be interesting to see how the Canadian public, business elite, and the government will each choose to react, especially if the dreaded r-word (recession) starts being thrown around.
It is important to note just how unstable economic growth has been, with Canada’s economy nearly grounding to a halt in the last three months of 2018. It only expanded at an annualized pace of 0.4 per cent in the fourth quarter, marking the worst quarterly performance in two and a half years, according to Statistics Canada. The nation followed the best two-month start to a year since 1981, although almost all gains were concentrated in Ontario.
For now, we will just have to wait and see.
What do you think is occurring in the Canadian economy? Are you worried about a recession?
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