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Most Canadians think the economy is on the wrong track, poll finds – Financial Post

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Data show a stronger economy, but Canadians feel worse off in their day-to-day lives

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Despite forecasts for stronger-than-expected growth in early 2024, a majority of Canadians just don’t like where the economy is headed, according to the latest results of a long-running survey of households’ financial outlook.

Two-thirds of Canadians believe the economy is on the wrong track, Maru Public Opinion found in its March survey, with the negative view widely held across most regions of the country.

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Albertans were most concerned about the economy’s trajectory. Almost three-quarters said they viewed the economy negatively, a seven percentage point increase from February, followed closely by Ontarians at 70 per cent, a six-percentage-point jump. Just over two-thirds of Quebecers thought the economy was headed in the wrong direction as did 55 per cent of British Columbians.

The latest results also reveal that many Canadians don’t expect either the national economy (61 per cent) or their local economy (59 per cent) to improve over the next two months. Both results were up slightly from February.

“The findings reveal a public profoundly discouraged about the state of the national economy, burdened by acute personal financial pressures, and harbouring deepening insecurities about the economic trajectory for themselves personally and the nation,” said John Wright, executive vice-president of Maru, in a press release on Thursday. “Negative sentiment is pervasive across multiple dimensions, underscoring the formidable headwinds confronting both consumer confidence and the nation’s broader economic prospects.”

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That “negative sentiment” is washing over gross domestic product forecasting that continues to be upgraded by some of Canada’s largest financial and economic institutions.

The latest GDP numbers from Statistics Canada showed the economy expanded 0.6 per cent in January, beating estimates of 0.4 per cent. The data agency also included a flash estimate for February for growth of 0.4 per cent, which compelled some big bank economists to predict first-quarter GDP of 2.5 per cent. On Wednesday, the Bank of Canada raised its forecast for growth in its new Monetary Policy Report.

Maru’s finding show that the stronger economy isn’t being reflected in the day-to-day lives of a large number of consumers.

For example, a larger proportion of Canadians said their personal financial position deteriorated in March — 24 per cent, compared with 23 per cent in February. Those most likely to have reported a deterioration in their view of their financial position included people in Atlantic Canada and Ontario, women, the survey’s 18-34 age group, and those in the lowest income bracket earning less than $50,000.

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More than half of Canadians said their daily and family finances would pose an ongoing worry over the next two months. Further, 90 per cent said it was not very likely that they would a buy a house during the next 60 days.

“You swapped out rising inflation and substituted it with hockey-stick high interest rates. That doesn’t put people ahead, it keeps them where they were,” Wright said.

On the flip side, an increasing number of people in British Columbia and Alberta and those earning incomes of $50,000 to $99,000 said their personal had finances improved.

Given persistent negativity, there was nothing to put upward pressure on Maru’s Household Outlook Index, which remained unchanged at 87 and firmly in negative territory.

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Anything below 100 on the index — which measures Canadians’ outlook on the economy and their personal finances — indicates negative sentiment and anything above indicates optimism. It has been stuck in the red since December 2021 and hit its most pessimistic reading of 83 in March 2023.

Maru conducted the survey March 28 to 29 among a random selection of 1,532 Canadian adults.

• Email: gmvsuhanic@postmedia.com

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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.

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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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