For Ontario’s economy, 2022 was supposed to show above average growth, according to CIBC.
Ontario, Quebec, and British Columbia will face the strongest economic headwinds next year and through 2024. That’s according to economists at CIBC expecting high household debt, real estate downturns, and tight labour conditions to strain Canada’s three most populous provinces.
The bank sees real GDP growth slowing to 0.6 per cent nationwide next year, following a 3.1 per cent gain in 2022. Ontario’s economic growth forecast for 2023 is the weakest among the provinces, at 0.3 per cent year-over-year. Saskatchewan is predicted to be strongest, at 1.6 per cent.
“The Canadian economy is facing plenty of headwinds at the moment,” economists Andrew Grantham and Karyne Charbonneau wrote in a report. “However, not all provinces will be impacted equally by these risks.”
For Ontario, they say 2022 was supposed to show above average growth as pandemic-led supply chain problems faded for key sectors like the auto industry. However, rapidly rising interest rates are now weighing on the province’s sizeable housing sector, pushing up borrowing costs for highly indebted households.
It’s a similar story in B.C., where the economists also note a “rapid adjustment” in home sales and the level of prices, in concert with rising interest rates.
“After years of chasing higher house prices by taking on larger mortgages, households in B.C. and Ontario have higher debt levels, and by extension pay the most interest to service that debt,” Grantham and Charbonneau wrote.
“With interest rates now rising on revolving debt, and with term debt coming due having to be refinanced at higher rates, households in these provinces will find their ability to spend on other items being squeezed particularly hard.”
CIBC says labour markets have tightened in all provinces compared to conditions three years ago, led by Quebec. Atlantic provinces were found to have the most favourable conditions, partially due to a high proportion of seasonal jobs.
The bank expects the strongest real GDP growth to come from the commodity-rich provinces of Alberta and Saskatchewan, owing in part to higher global oil and gas prices driven by Russia’s war in Ukraine.
CIBC says Atlantic provinces continue to benefit from an influx of new residents fleeing unaffordable housing markets in Ontario and B.C. Ontario recently recorded the largest outflow of residents since Statistics Canada started collecting the data.
“This trend, which started during the pandemic, shows no sign of slowing,” Grantham and Charbonneau wrote. “The work-from-home revolution has opened up options to many people across the country, who are no longer tied to a location because of work.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
Download the Yahoo Finance app, available for Apple and Android.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
