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Economy expected to show continued strength, flood recovery poses challenges | BC Gov News – BC Gov News

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British Columbia’s economic growth is expected to outpace Canada’s in 2021 and 2022, according to projections from the Economic Forecast Council (EFC).

However, yet-to-be-determined economic impacts from recent flooding and extreme weather may affect future forecasts.

Each year, B.C.’s finance minister meets with the 13-member council of private-sector forecasters as part of preparation for the next year’s budget. This year an additional set of discussions was added, providing an opportunity to consult with a new Environmental, Social, Governance (ESG) Advisory Council to further explore how the provincial government can continue to build resilience and support well-being in British Columbia.

Private-sector forecasters anticipate that, despite the pandemic, the province’s economy will grow by 5.3% in 2021 and 4.2% in 2022, which is above the respective national GDP estimates of 4.9% and 4.1%. Although B.C.’s economy contracted in 2020 due to impacts from the COVID-19 pandemic, B.C. was among provincial leaders last year and the economy’s 3.4% decline was smaller than originally projected.

“Momentum from our strong recovery and increasing vaccination rates over the last few months has helped put B.C. on a good path for future economic growth,” said Selina Robinson, Minister of Finance. “There are more challenges ahead, but forecasts signal the work we have done so far has put us on the right track and provided us with a solid foundation to continue responding to the pandemic and recent flooding and support a strong recovery for British Columbians.”

Discussions with the EFC and the ESG Advisory Council focused on current events, issues affecting B.C.’s economy and the environmental, social and governance opportunities and challenges facing the province. Key topics at the meetings:

  • climate change risks and impacts on people,
  • housing affordability,
  • reconciliation with Indigenous Peoples,
  • trade tensions and supply chain disruptions,
  • standard of living, poverty and inequality,
  • diversity and inclusion,
  • economic resilience and sustainability,
  • natural resource development, and
  • policies and measures that build shared prosperity.

 “As we look to our recovery, we are aligning our investments with our priorities to ensure that while we grow our economic resilience, we are also making progress on addressing climate change, reducing poverty and inequality, and advancing reconciliation with Indigenous Peoples,” Robinson said. “Following the incredible hardship our province has faced with this year’s floods and fires during a pandemic, it’s never been more important for us to share ideas about building resilience and sustainability.”

Several forecasters noted that the provincial government’s commitments to addressing climate change, its 10-year housing plan, record levels of capital investment and continued work to diversify the economy, have helped to insulate the province from some economic impacts and position the province well for longer-term sustainable growth.

Forecasts and feedback from the two councils will be used to inform the next provincial budget, which will be released on Feb. 22, 2022. EFC members will also have an opportunity to submit revised forecasts in early January.

Quick Facts:

  • In the Province’s Second Quarterly Report, which does not yet incorporate impacts from the recent extreme weather and flooding, B.C. projected a revised deficit of $1.7 billion for the 2021-22 fiscal year, which is a significant improvement from the deficits previously estimated in Budget 2021 and the First Quarterly Report.
  • Environmental, social and governance are three main categories often discussed when evaluating sustainability performance, risk mitigation planning and societal well-being.

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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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 Press. All rights reserved.

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Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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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.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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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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