The total value of all the goods and services produced in Canada’s economy shrank for the first time in a year in April, a reminder of the unprecedented impact of COVID-19 even as provinces tentatively reopen.
Statistics Canada reported Wednesday that Canada’s gross domestic product (GDP) shrank by 0.3 per cent as a majority of industries had less output during the month than they did in March.
All in all, April’s data shows that Canada’s economy is still not as big as it was in February 2020, before the onset of the pandemic.
Then, the economy was worth just over $2 trillion. According to the latest numbers, it’s now at $1.978 trillion, after bottoming out in April at just over $1.6 trillion.
Goods-producing industries expanded by 0.5 per cent, but that was more than offset by a contraction of 0.6 per cent in the service sector, which is a much larger part of Canada’s economy.
Retail, manufacturing and the real estate industry led the declines. On the other side of the ledger, construction, oil and gas, and the public sector grew.
Economist Sri Thanabalasingam with TD Bank noted that so-called “high touch” industries like retail, food, accommodation, and arts and entertainment were hardest hit.
“The economy’s march towards a full recovery took a step back in April as the third wave and tighter restrictions weakened activity for the month,” he said.
Preliminary numbers for May suggest that the economy shrank again last month, by another 0.3 per cent. That would be the first two-month decline since the dark days of March and April of last year, but Thanabalasingam says he’s confident the economy has turned the corner.
“April and May were likely temporary setbacks to the recovery. Better days are already here. Reopening across the country, falling cases and hospitalizations, and an extraordinary vaccine rollout should lead to a rapid bounce back in economic activity,” he said.
“Although the delta variant could create some challenges, Canada’s inoculation pace could keep such risks at bay. The clouds are parting, the worst of the pandemic could finally be behind us.”
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
