Canada’s economy is largely expected to rebound this year, but a recent report suggests Canada could fare worse than similar countries in 2024 due to high levels of household debt.
An Oxford Economics report projects interest rates will come down in late 2024 as Canada experiences a “modest recovery.” But the researchers cautioned that the bounce-back will fall below consensus projections and “worse than other advanced economies.”
“One of the reasons we think Canada is going to have a recession and the U.S. might avoid one is because we have highly indebted households that are very dependant on the housing market and the economy and those impacts are flowing through now,” Tony Stillo, Oxford Economics’ director of economics for Canada, told BNN Bloomberg in Wednesday interview.
Overall, the December report suggested that Canadians will remain reluctant to spend even as interest rates come down.
It also predicted immigration will help the labour market, but hurt the country’s housing supply.
“(Immigration) will benefit the economy,” Stillo said in the interview. “What we’re seeing is that it adds to the labour supply, but it takes a while for newcomers to fully settle into the economy, so that benefit for the economy in terms of higher actual GDP will be a few years away,”
Stillo doesn’t expect elevated immigration figures will impact home prices, as newcomers typically rent for a few years when they first arrive in the country. That means rental prices will be squeezed, but home prices shouldn’t feel the effects, he explained.
GOVERNMENT POLICY
Stillo said he expects governments will come up with smaller measures to fight economic slowdown in order to avoid stoking inflation.
“What we’re expecting to see is modest targeted measures like you’ve seen to date, whether it’s the exemption from the carbon tax for home heating fuel, the GST exemption for purpose-built rentals, the grocery rebate, things of that nature,” he said.
BUSINESS INVESTMENT
If Canada wants to get back on the right track, it needs a boost from businesses, Stillo said.
“We’ve had lacklustre business investment for some time, what we need to see is higher investment by businesses (and) government as well in terms of the infrastructure that supports growth, and then you’ll see that benefit in terms of higher productivity,” he said.
“We have to improve our capital investment per worker, per person, and then we will hopefully get that benefit in productivity and higher living standards.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
