TORONTO —
There is reason for a little optimism if all goes according to plan. The Organisation for Economic Co-operation and Development sees improvement in global growth of 5% in 2021 if the virus remains contained and health measures are followed. The hope is consumer and business confidence will continue to grow and that would be supported by the government’s ability to help maintain jobs leading to an increase in demand for goods and services.
Sounds ideal.
However, the wildcard continues to be the flare up of COVID-19 and should that happen you could see 2-3% removed from the growth projections.
The OECD sees Canada contracting this year by 5.8% and then experience growth of 4% in 2021. Assuming that happens, it will be good news for the economy and challenging news for some households.
While looking at the big picture there is little doubt the various relief measures put into place have helped to cushion the financial blow to economy and for Canadians. Government, banks and businesses have all combined to help families get by and support the economy. But that financial aid could be coming to an end as it appears to have done the job.
There is little doubt short term financial relief will end ultimately with the economy expected to start growing again, yet household finances have been destroyed. The financial relief provided to many has been a bandage and sadly when that bandage is ripped off it is going to hurt. According to MNP, 43% of Canadians are still experiencing disruption to their own work situation or a family member in the form of lay-offs, reduced pay or few working hours.
“Even in good times, many household budgets teeter on a knife-edge. We know that many don’t have enough emergency savings to cope. And though we’ve yet to see any concrete evidence Canadians have significantly increased their debt loads since March, there’s reason to think many will turn to credit when relief measures end,” explains Grant Bazian, president at MNP LTD.
Canadians may be forced to borrow at higher interest rates driven in part by the fear of being unable to make a rent payment. In fact, 16% say they would have to sell their home to make ends meet once the support comes to an end. While 21% are hoping to defer mortgage payments even further.
Our most financially vulnerable Canadians are going to be exposed when the benefits end while consumer proposals and bankruptcies will surely increase.
The pandemic has created uncertainty, chaos and heartbreak while at the same time masking the underlying debt problems of our most vulnerable Canadians. The good news of an economy that starts to grow again will hopefully help some families seek out additional income streams to provide some financial stability that is so desperately needed.
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.
