Forecasting a constantly changing environment like the economy can be challenging, with numerous uncertainties and risks. At any time, a new data point could come out and turn everything on its head.
Even still, the Conference Board of Canada released its forecast last week for the St. Catharines-Niagara economy, showing an anticipated growth of 4.4 per cent in 2022, followed by a 2.6 increase in 2023.
It’s an optimistic outlook, but one Viktor Cicman said is feasible, especially when compared to where the region was at the peak of the COVID-19 pandemic.
“Because of such a large decline that happened in 2020, one would expect, just naturally, that if things start to pick-up, nearly back to where it was, you’re going to get strong growth rate. That’s what happened last year,” said Cicman, an economist with CBoC.
In 2021, the real GDP growth in St. Catharines-Niagara reached 6 per cent — which Cicman credits to the strength of the second half of the year — almost offsetting the 6.1 decline in 2020.
And that has continued into this year. Despite communities still battling COVID-19, the lifting of public health restrictions and high vaccination numbers has enabled the region to grow. Cicman said each wave of the pandemic seems to be impacting the economy less and less, leading to optimism for the upcoming fall and winter seasons.
“There is a lot of pent-up demand for services or going out to places, restaurants, hotels, tourism — despite some of the virus still around, despite some of the costs increasing,” said Cicman. “So that’s really good.”
As part of the research, Cicman said they look at the output from each sector and historical data, including employment, housing, population, construction, immigration and upcoming projects. Every section is examined, in 11 major cities across Canada, to determine the board’s forecasts for economic growth.
For Niagara, tourism was a key element of the CBoC outlook. As those numbers continue to recover, the increasing focus on vehicle travel has also helped. While the price of gas has gone up, Cicman said people are taking in that cost but are still wanting to travel after two years of lockdowns.
“If this was an airport destination — and it still is, so the international travel from outside America will take awhile to recover — but the vehicle travel will help that,” he said. “The numbers have been pretty good so far. A lot of people travel within the province to Niagara, a lot of people from America to Niagara.”
And while the real estate market has slowed down from Niagara’s pandemic peak, with three months of decreasing sales, demand is high, with the region remaining a “desirable area.”
The pandemic impacted the region’s immigration, limiting the number of foreign students and migrant workers who are “important parts of the labour market,” but Cicman said he expects that to recover.
Manufacturing has continued to remain vital to the economy, with solid growth throughout 2021.
“They’ve recovered quite well and they’re still always employing lots of people,” said Cicman
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One short-term element the forecast considered was the Canada Summer Games taking place in Niagara and while it is not sustainable long-term, Cicman said it will play a part in getting people back to the region. It could also help locally, in encouraging residents to get out into the community and support local events.
But, at the same time, Cicman said there is always the potential that “maybe our recovery isn’t going to be as high as we may have put in the forecast,” whether that’s due to inflation or higher interest rates. He said, for example, both supply and labour could see a negative impact, despite additional demand.
“A lot of the people that were working before the pandemic, and there were signs of shortages already, haven’t all returned. So that put a bit of a damper on how much can actually grow,” said Cicman. “Even if there is demand, and they just don’t have enough staff to provide all the services, that will also affect them.”
There are pluses, minuses and caveats in all directions, which makes it challenging to forecast what will happen. But regardless, compared to where St. Catharines-Niagara was in 2020, Cicman said “it is recovering now,” and doing “quite well.”
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.