Approaching the middle of August, Prince Edward Island’s economy is entering a stage where we can assess the seasonal cycle. We can evaluate the success of our tourism season, and the effectiveness of our reopening. Having spent 25 years as a tourism operator outside Charlottetown, the seasonal peak always occurred prior to Old Home Week when traffic starts to migrate toward the capital centre. So this is a good time to calibrate register receipts.
But reliable data is in short supply. By observation, I would concede that Island business experienced a burst of enthusiasm through each successive stage of economic reopening. The pent-up energy of buying ice cream, browsing retail, dinning out or getting a haircut was intense; but now satisfied.
As increased competition for share of wallet spreads the local purchasing power across many seasonal businesses, the influx of tourists has been appreciated, but muted, as measured in traffic flows.
The long-lasting consequences of the pandemic shutdown is an adjustment to consumerism. Shelter in place, eat at home, shop online and suspend travel. These are economy-breaking behaviours, which will take time to readjust.
Business continuity
After a false-start in March, P.E.I. Premier Dennis King recast his economic guidance taskforce in the middle of May. This is one of the most diverse and impressive group of industry leaders recently assembled, under the banner of the Business Continuity Group (BCG). There is strong thought-leadership embedded, but the group is unwieldy.
A quarter into the BCG mandate and with little communication outside a twitterbot that rebroadcast a few community tweets, the business community is ravenous for the promise offered in the group’s inception.
Reliable, decision-worthy data lags too long in a responsive environment. Even Jerome Powell, U.S. Federal Reserve chairman, is looking at non-standard, high-frequency data to make assessments — data like credit card purchases. What he has seen in the U.S. is an economic uptick in May and June where consumer spending recovered half off the March lows and employment recovered one-third of their losses. But in July, partially from viral resurgence, credit card purchases have slowed, and small business job growth is stalling.
This data is not perfect, but it is the best available. The diversity of the BCG and the breadth of industries touched can provide real-time, generalized analytics on accommodation bookings, retail sales, tourism investment, manufacturing and business purchases. This information is essential for all Island small businesses when forecasting investment, hiring or compression into the fall. We need to release this data.
Weekly updates
I would appeal to the premier to release preliminary findings, not the euphoric economic restart optimism, but practical trending data and provide this information in real-time on a weekly basis. Business needs current information on which to make informed decisions.
If elements of the economy are performing well — and some sectors absolutely are — this is great news. If sectors are suffering — and unquestionably some are — then use this data for policy directives to induce and support industry.
Our seasonal economy is within a quarter of annual suspension. The economy needs a plan for the “off season” with federal CERB and rental rebates winding down, the economic underpinnings will feel the challenges deferred from spring.
The premier has mused about encouraging Islanders to apply tourism dollars locally. Perhaps economic inducements can be offered to Islanders this fall/winter.
New initiatives
In 1891, the Merchant Bank of Prince Edward Island issued bank notes. Can the government issue a 10-per-cent Buy-P.E.I. credit for local money spent in our Island bubble?
This encourages a local spend and multiplication benefit at a time when our domestic Island economy will be entirely self-reliant … but still competing with Amazon, Walmart and Costco.
Keep the spend-and-tax revenue local. Easy decision!
Island business should be extended provincial benefits to maintain post-seasonal employment, or even add new hires. This should be paired with the return to school plan and a goal of recovering our labour participation rate to an aspirational 75 per cent. Our government could offer business interruption insurance, available to companies that can demonstrate a year-over-year decline of a measurable percentage, lagging by a quarter to support stabilization.
Construction carries our economy; as goes construction, so goes our economy. But population is required to continue this run. According to the province’s population projections in September 2019, our natural population rates turns negative in seven years. Now is the time to work on an Employ P.E.I. strategy to attract professionals who are eager to live in our pristine (COVID free) environment and contribute to our economy. (We see these people regularly through my recruitment firm).
More difficult, the government needs to articulate a strategy to taper investment or redirect its budget to economic stabilization. Spending cannot continue in all directions – but investing in the economy will increase revenues.
The Business Edge is always happy to dispense free advice, the value of which is equivalent to the cost. Perhaps other Islanders can contribute to this conversation on our collective economic future.
Blake Doyle is The Guardian’s small business columnist.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
