KPMG survey finds support for continued investment in the economy ahead of federal budget, but Canadians want stimulus focused on long-term economic growth - Canada NewsWire | Canada News Media
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KPMG survey finds support for continued investment in the economy ahead of federal budget, but Canadians want stimulus focused on long-term economic growth – Canada NewsWire

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“The vast majority of Canadians want government to launch a major stimulus program to get our economy moving again,” says Mary Jo Fedy, National Leader, Enterprise, KPMG in Canada. “But they also want those investments centred around areas that will drive sustained health and prosperity in the country. The areas they would like targeted are, not surprisingly, healthcare and domestic manufacturing – two key sectors whose importance to the country was highlighted during the pandemic.”

Key Survey Findings:

  • 77 per cent believe we need government to step in with a major stimulus program to get our economy back to pre-Covid levels, down from 82 per cent in a January poll conducted by KPMG
    • 25 per cent want investments in healthcare/health sciences, down 9 per cent
    • 24 per cent want investments in domestic manufacturing, up 2 per cent
  • 89 per cent say future spending must be prudent, targeted and focused on initiatives that will grow our economy
  • 88 per cent say small- and medium-sized businesses in Canada have been the economic victims of the pandemic and government needs to do more for them, up 1 per cent from January

93 per cent want government to create incentives to “buy Canadian” to restart our economy and ensure we build necessary domestic capacity to supply our critical needs, up 1 per cent.

Vaccine rollout brings optimism, but questions about Canada’s economic recovery remain 

Canadian confidence that the economy will recover this year has slipped a little, with those very confident of a rebound in 2021 falling 4 per cent since January. But the recent ramp up in vaccine rollout has the nation more optimistic that we will see sustained growth in the latter half of the year.

“Now that vaccine programs are gaining momentum, we are seeing growing optimism that better days are ahead,” says Ms. Fedy. “But many individual Canadians and businesses still have a big hole to dig out of and will need further support. The last year has seen unprecedented challenges to our health, communities and economy, and most Canadians believe government will need to continue playing an active role until we’ve crushed Covid and our economy finds its feet again.”

Ms. Fedy notes that no matter what is contained in the upcoming federal budget, the pandemic has reshaped the Canadian economy, placing pressures on companies across all sectors to operate digitally – in both the way they create and sell their products and services.

“Some companies have been able to adapt and make this change effectively, but others have struggled and will need support to build their digital capabilities and workforces,” adds Ms. Fedy. “The Canadian economy has an opportunity to come out of this crisis stronger and more resilient that ever with the right kinds of investments and leadership.”

While Canadians are optimistic that vaccines will get their lives and the economy back on track soon, one thing they are not ready for is a reopening of the border with the United States. Barely one quarter of Canadians said it is time to start thinking about resuming normal traffic between the two nations.

Other poll findings

  • 64 per cent of Canadians are very confident the overall Canadian economy will recover in 2021
  • 91 per cent are hopeful widespread vaccinations by July will boost the economy in the latter half of the year
  • 84 per cent believe our economy has been forever changed – all businesses, no matter how small, need to be able to operate online
  • 91 per cent say the pandemic has shown a real need for Canadian businesses to improve their online presence and service
  • 28 per cent say it in now time to think about reopening the border with the U.S.

KPMG’s professionals are available to provide insights and commentary on the upcoming 2021 federal budget.

About KPMG in Canada’s Outlook Survey / Confidence Survey

KPMG surveyed 1,000 Canadians aged 18+ from March 17 to 20, 2021 to discern changes in the public’s confidence in and attitudes toward the economic recovery from the COVID-19 pandemic. This follows a survey of over 4,000 Canadians in January 2021 examining public sentiment on the health and economic impacts of COVID-19. For each study, KPMG leveraged the AskingCanadians panel by Delvinia through its methodify online research automation platform.

About KPMG in Canada

KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs nearly 8,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada’s top employers and one of the best places to work in the country.

The firm is established under the laws of Ontario and is a member of KPMG’s global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see home.kpmg/ca

SOURCE KPMG LLP

For further information: Nancy White, National Communications, KPMG in Canada, (416) 777-3306, (416) 777-1400, [email protected]

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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.

The Canadian Press. All rights reserved.

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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.

The Canadian Press. All rights reserved.

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Economy

September merchandise trade deficit narrows to $1.3 billion: Statistics Canada

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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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