Data show a stronger economy, but Canadians feel worse off in their day-to-day lives
Despite forecasts for stronger-than-expected growth in early 2024, a majority of Canadians just don’t like where the economy is headed, according to the latest results of a long-running survey of households’ financial outlook.
Two-thirds of Canadians believe the economy is on the wrong track, Maru Public Opinion found in its March survey, with the negative view widely held across most regions of the country.
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Albertans were most concerned about the economy’s trajectory. Almost three-quarters said they viewed the economy negatively, a seven percentage point increase from February, followed closely by Ontarians at 70 per cent, a six-percentage-point jump. Just over two-thirds of Quebecers thought the economy was headed in the wrong direction as did 55 per cent of British Columbians.
The latest results also reveal that many Canadians don’t expect either the national economy (61 per cent) or their local economy (59 per cent) to improve over the next two months. Both results were up slightly from February.
“The findings reveal a public profoundly discouraged about the state of the national economy, burdened by acute personal financial pressures, and harbouring deepening insecurities about the economic trajectory for themselves personally and the nation,” said John Wright, executive vice-president of Maru, in a press release on Thursday. “Negative sentiment is pervasive across multiple dimensions, underscoring the formidable headwinds confronting both consumer confidence and the nation’s broader economic prospects.”
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That “negative sentiment” is washing over gross domestic product forecasting that continues to be upgraded by some of Canada’s largest financial and economic institutions.
The latest GDP numbers from Statistics Canada showed the economy expanded 0.6 per cent in January, beating estimates of 0.4 per cent. The data agency also included a flash estimate for February for growth of 0.4 per cent, which compelled some big bank economists to predict first-quarter GDP of 2.5 per cent. On Wednesday, the Bank of Canada raised its forecast for growth in its new Monetary Policy Report.
Maru’s finding show that the stronger economy isn’t being reflected in the day-to-day lives of a large number of consumers.
For example, a larger proportion of Canadians said their personal financial position deteriorated in March — 24 per cent, compared with 23 per cent in February. Those most likely to have reported a deterioration in their view of their financial position included people in Atlantic Canada and Ontario, women, the survey’s 18-34 age group, and those in the lowest income bracket earning less than $50,000.
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More than half of Canadians said their daily and family finances would pose an ongoing worry over the next two months. Further, 90 per cent said it was not very likely that they would a buy a house during the next 60 days.
“You swapped out rising inflation and substituted it with hockey-stick high interest rates. That doesn’t put people ahead, it keeps them where they were,” Wright said.
On the flip side, an increasing number of people in British Columbia and Alberta and those earning incomes of $50,000 to $99,000 said their personal had finances improved.
Given persistent negativity, there was nothing to put upward pressure on Maru’s Household Outlook Index, which remained unchanged at 87 and firmly in negative territory.
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Anything below 100 on the index — which measures Canadians’ outlook on the economy and their personal finances — indicates negative sentiment and anything above indicates optimism. It has been stuck in the red since December 2021 and hit its most pessimistic reading of 83 in March 2023.
Maru conducted the survey March 28 to 29 among a random selection of 1,532 Canadian adults.
• Email: gmvsuhanic@postmedia.com
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VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
The Canadian Press. All rights reserved.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
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