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Are Justin Trudeau and his cabinet the worst economic managers in the history of the country or just the worst since Confederation?
Are Justin Trudeau and his cabinet the worst economic managers in the history of the country or just the worst since Confederation?
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This week during a speech in Halifax, Bank of Canada Senior Deputy Governor Carolyn Rogers pointed out that Canada’s level of industrial productivity had fallen to the lowest in the G7.
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The level of business investment, too, is pathetic — the worst so far this century.
Rogers is expected to become the bank’s first female governor when the incumbent, Tiff Macklem, steps down, so it was highly unusual for her to all but blame the Trudeau government’s sophomoric economic, fiscal and industrial policy for the decline in Canada’s economic strength (and the decline in Canadians’ standard of living).
Growth in Canada is mired in a long run of just inching forward. We are not technically in a recession, it just feels like one.
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However, if there were such a thing as a productivity recession, we’d be in one. Productivity in Canada has fallen for six straight quarters.
This would be bad at the best of times. It indicates a couple of rocky years ahead for the economy. But coming at the same time as the Liberals are flooding the country with newcomers, it’s adding great strains to the economy, housing and inflation.
Another sign of economic weakness ahead: Government under the Trudeau Liberals has grown from 23% of Gross Domestic Product to 27%, while business spending on new machinery, technology, factories and equipment has slipped to 8% of GDP. So-called capital spending is half of what it is in the U.S.
Per capita GDP — a broad indicator of a country’s wealth — grew by 2.6% in the U.S. last year. Here it fell by 0.6%. More importantly, after adding in nearly a 3% increase in population, Canadian per capita GDP fell by almost 4%.
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Unless you want to depress yourself, don’t even think about the added harm to our economic well-being done by inflation of nearly 4%.
It’s disastrous. And it is almost entirely due to the Trudeau government’s economic decisions, such as hobbling the energy sector in the name of saving the planet. That strategy is particularly galling because it is useless at combatting climate change. In a recent report on the carbon tax, the centrepiece of the Liberals’ environmental strategy, the Parliamentary Budget Officer calculated the federal levy was adding to inflation, but because Canada is only responsible for 1.5% of global carbon emissions, the tax’s impact on the environment was negligible.
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All pain, no gain.
Not surprisingly, in this economic environment, major business investment has stalled. Investors are reluctant to commit millions and billions when next week, next month or next year, the Trudeau government could decide on some new woke regulation or cap or ban that makes an investment today worth much less in the coming year.
Take for instance Bill C-56, an effort to crack down on “abusive practices” in grocery retailing. While Canada has an especially uncompetitive grocery sector for a developed country — Sobeys, Metro, Loblaw, Walmart and Costco control over 85% of the grocery market — the Bank of Canada could find no evidence of widespread price fixing. Allegations of collusion are mostly myths clung to by Liberals and New Democrats.
Still, the Liberals’ proposed solution to rising food prices is to empower the federal industry minister to make fairness decisions. When was the last time increased bureaucracy made any item cheaper?
Our sluggish economy is only going to be weighed down further next week when the Liberals increase their economic-damaging carbon tax by another 23%.
In the private sector, incompetent management like this would lead to firings. But in Trudeau’s Canada, it is being rewarded by a pay raise for MPs that will make them the second-best paid national politicians in the world.
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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.
The Canadian Press. All rights reserved.
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.
The Canadian Press. All rights reserved.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
The Canadian Press. All rights reserved.
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