The B.C. economy is starting to recover from the effects of the pandemic, a new fiscal update shows, but for students, municipalities and some businesses, the shift means that the province is now seeking to collect on temporary relief offered in the early months of the economic shutdown.
Finance Minister Selina Robinson said Thursday that the province is unlikely to fully recover from the pandemic-induced global recession before the end of 2022, and only after widespread immunization for COVID-19 has been achieved, and global travel restrictions ease. But already in B.C., housing and consumer spending have surpassed pre-pandemic levels, while employment has almost returned to February numbers.
“Our economy is en route to recovery,” she said. After an estimated 400,000 job losses in the spring, when the pandemic sparked widespread restrictions on activities and travel, B.C. has counted seven consecutive months of job growth. “This is the highest job-recovery rate of any of Canada’s four largest provinces,” Ms. Robinson noted.
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However, B.C.’s recovery is uneven, with deep inequities revealed as many entry-level and low-wage jobs have evaporated due to pandemic restrictions on travel and gatherings.
Those job losses have hit young workers hard. The unemployment rate for people aged between 15 and 24 years was 14.1 per cent in November, but the six-month moratorium on student-loan collection has ended and now the province is seeking to collect $70-million from students.
Tanysha Klassen, chairperson of the B.C. Federation of Students, said the repayment requirement didn’t come as a surprise, but it is tough because the economic recovery isn’t being felt by many students.
“It’s super unfortunate the moratorium is ending, when it feels like we are in the middle of this pandemic,” Ms. Klassen said. “Students and young people are often working in service and hospitality sectors, which are still hit hard. So it’s pretty tough out there for people who want to keep going to school.”
Students are not the only ones seeing their pandemic relief dry up. BC Hydro had deferred $103-million in payments for industrial customers, and those payments are now due to be collected. And the grace period for municipalities to remit more than $1-billion in school taxes expires at the end of the year.
The province is not expecting it will be able to collect on all it is owed. “There may be payment defaults on some of these revenues owed to government, depending on the breadth and duration of the pandemic, as well as consumer and business confidence and behaviour,” the province’s fiscal update report warns.
Ms. Robinson, speaking to reporters, would not commit to extending the deferrals. “We’re back to 98.5 per cent of the jobs that were lost … which is a good sign,” she said. “We’re monitoring very closely. We’re going to continue to be responsive to businesses and to individuals.”
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Job losses have been highest in sectors including construction, retail, accommodation and food services. Those losses have been offset, in part, by the growth in professional and manufacturing jobs since February.
The Finance Minister said the government is focused on retraining opportunities because it is unclear when some sectors, such as tourism, will recover.
The province has committed to $10-billion in pandemic emergency measures this year, and the deficit is now forecast to reach $13.6-billion. That figure includes $2-billion in new pandemic spending measures approved this week in the legislature.
Still, the province currently retains its long-term triple-A credit rating, although two of the four major bond-rating agencies have given B.C. a negative outlook in the short term.
Since the past fiscal update three months ago, provincial revenues have fared better than projected, with gains in income taxes and property transfer taxes because of a strong housing market. Private-sector economists forecast that the economy will shrink by 5.2 per cent this year – just below the national average of 5.7 per cent. In 2021, the economy is expected to grow by 4.5 per cent – in line with the national average.
However, the uncertainty of the forecasts remains significant. “The major risks to the updated economic and fiscal forecasts continue to be the extent of the spread or containment of the virus in B.C. and its major trading partners; the timing, efficacy, availability and distribution of COVID‑19 vaccines; and the behaviour and confidence of individuals, consumers and businesses,” the fiscal update states.
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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.
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