Quebec is set to reveal how it plans to support cash-strapped households without spending more money than it can afford.
Tomorrow, the Coalition Avenir Québec (CAQ) government will provide an update on the province’s financial situation.
Finance Minister Eric Girard indicated in September that his main priorities would be tackling affordable housing issues and homelessness as well as better positioning Quebec to adapt to climate change.
But he will be trying to solve those problems in a weakening economy.
Quebec’s real GDP shrank by 1.9 per cent on an annualized basis in the second quarter.
The economic contraction was due in particular to a decline in investment spending, a slowdown in inventory and a drop in household spending, according to the Institut de la statistique du Québec.
In comparison, the Canadian economy contracted by just 0.2 per cent.
While some economists believe it’s too early to say Canada’s economy is in recession (the country recorded a $2.082 trillion GDP in August, which was slightly higher than $2.081 trillion in July), early indicators suggest that the economy has not grown significantly since May.
Given the lack of economic growth, tomorrow’s announcement might not be as generous as previous updates, warns AppEco director Philippe Gougeon, an economist and former chief of staff to the finance minister.
“Everyone knows there won’t be money for everybody. There are no pre-economic-update consultations,” he said. “The expectations aren’t the same so the government has to put aside money for the budget.”
Housing measures
During the update, the government is set to release details on a new fiscal pact with municipalities, a deal it has reached to transfer revenues to allow cities and towns to try to solve problems like climate change, housing and homelessness.
Quebec is also expected to announce the creation of a $250-million fund specifically for affordable housing, according to information obtained by La Presse.
More information is expected on how the $900 million in funding for the acceleration of housing construction will be used within five years following an agreement in principle between Quebec and Ottawa.
The federal government will provide Quebec with $900 million under the Housing Acceleration Fund. (Martin Thibault/Radio-Canada)
The federal government will match that amount for a total of $1.8 billion allocated to Quebec housing. The agreement is part of Ottawa’s $4-billion Housing Accelerator Fund, which aims to build 100,000 new housing units across the country.
Those sums for housing come on top of the $15.5 million put toward building shelters for people experiencing homelessness that Lionel Carmant, the minister responsible for social services, announced in September.
Cost of living
Measures to offset the cost of living for those who are struggling the most financially will likely be announced, based on hints from Premier François Legault at the CAQ caucus meeting in September.
Gisèle Tassé-Goodman, president of the Réseau FADOQ, a Quebec seniors organization, is holding out hope that some of the measures will help put an end to the closure of small, private seniors’ residences and support elderly residents with fixed incomes who barely make ends meet.
The government is expected to release details on a new fiscal pact, a deal it has reached to transfer revenues to municipalities to allow them to try to solve problems like homelessness. (Bruno Giguère/Radio-Canada)
“The median income of people aged 65 and over is less than $28,000 a year, which is not enough to keep up with the rising cost of living,” she said. “It’s important not to uproot these people to other private seniors’ residences, which are often in bigger cities” and generally more expensive.
The finance minister does not appear to like the idea of issuing additional cheques to Quebecers, as the government did in 2022, saying the CAQ is one of the governments that has already done the most to help alleviate Quebecers’ financial burdens.
Cheques ranging from $400 to $600 were issued last year, and income taxes were also lowered.
Girard has said he doesn’t want to contribute to inflation by handing out money and says Quebec’s fiscal policy now has to align with the Bank of Canada’s interest-rate policy.
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.
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.
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.
