The former chief economic analyst of Statistics Canada poses a dire warning to Canadians in an essay on our slow economic growth, produced for the fiscally conservative Fraser Institute.
Philip Cross says with Canada’s economic growth increasing at the slowest rate since the Great Depression, the Trudeau government risks doing irreparable societal harm by focusing on redistributing income, rather than economic growth.
“History shows that previous periods of economic stagnation or decline have unleashed social and political forces far worse than protectionism,” Cross writes, citing a warning by Austrian economist Friedrich Hayek, who grew up during the Great Depression that “the one thing modern democracy will not bear without cracking is … a substantial lowering of the standards of living in peace time, or even a prolonged (stagnation) of its economic conditions.
“Canada is in a full-blown economic growth crisis which is homegrown and due largely to poor government policy … rooted in declining business investment and stagnating growth in exports, two critical sectors of the economy.”
Cross cites a 2021 report by the Organization for Economic Co-operation and Development predicting “Canada’s per capita GDP growth between 2020 and 2060 will be the lowest among its 29 member nations.”
He says annual per-person GDP — a measurement of prosperity — grew by only 0.8% from 2013 to 2022 after adjusting for inflation, the worst showing since the 1930s when it was negative 0.3%.
Cross notes the government can’t blame the pandemic because Canada’s slow economic growth rate began before it started in early 2020.
From 2016 to 2022, economic growth in the U.S., adjusted for inflation, grew by 11.7% compared to just 2.8% in Canada.
The value of business investment in Canada at the end of 2022, adjusted for inflation, was 17.6% lower than in 2014, while the value of exports basically flatlined.
Rather than encouraging capitalism and competition, Cross says, the Trudeau government has pursued policies leading to “persistent budget deficits and chronic slow growth … low rates of business formation, regulatory uncertainty, barriers to investment (especially in the resources sector), restrictions on internal trade … and low levels of productivity and innovation.”
On the optimistic side, he says it’s not too late to turn things around, but only with a fundamental change in government policies.
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.
