TORONTO —
As affordability becomes a key topic during the federal election campaign for all major parties, the news that the Canadian economy contracted in the second quarter is bad for both the Liberals and the Conservatives, according to pollster Nik Nanos.
On Tuesday, Statistics Canada reported that the economy contracted at an annualized rate of 1.1 per cent between April and June – the first quarterly contraction since the first COVID-19 wave lockdowns in 2020. To make matters worse, the agency also estimated another drop in real gross domestic product in July.
“The news yesterday that the economy had shrank would not be good for any incumbent government,” Nanos said on Wednesday’s edition of CTV’s Trend Line podcast. “The last thing that you want is for the numbers to come out and to suggest that the economy is shrinking.”
Nanos said the Liberals called the election when they did because they were hoping to capitalize on good will from the Canadian public for their handling of the pandemic and the supply of COVID-19 vaccines they procured while getting ahead of future concerns about the economy related to the pandemic.
“This GDP number is bad for the Liberals,” he said. “It undermines one of the key pillars that they were hoping would be in place.”
This latest news also won’t help to restore Canadians’ faith in the economy, according to Nanos, who said the population is already feeling “grumpy” about it. He said the latest weekly Bloomberg-Nanos tracking on consumer confidence shows that.
According to the data, 37 per cent of Canadians believe the economy will get stronger (down seven percentage points from four weeks earlier), while 30 per cent believe the economy will get weaker, and about 20 per cent believe there will be no change.
“The trend in terms of consumer confidence has been dropping over the last couple of weeks and couple that with a drop or shrinking of the economy and the GDP, it is basically a one-two punch in terms of creating negativity, anxiety and concern among Canadians when it comes to the economy,” Nanos said.
And while the shrinking economy spells trouble for the Liberals, Nanos said the Conservatives won’t fare much better thanks to their dependence on economic growth in their platform. According to the plan, the Conservatives would be able to balance the budget without any cuts within 10 years.
However, the plan hinges on the assumption that there will be an annual GDP growth of roughly three per cent, which some economists believe is unrealistic, Nanos said.
“These GDP numbers don’t help [Conservative Leader] Erin O’Toole because if the economy is shrinking, and your fiscal plan is based on the economy growing, it’s hard to reconcile those two things, at least for average voters,” Nanos said.
O’Toole will need to defend his platform in order to maintain the “mini advantage” he has over Liberal Leader Justin Trudeau in Nanos Research’s latest nightly tracking conducted for CTV News and the Globe and Mail, which was released on Wednesday morning.
According to the data, the Conservatives are leading with 33.7 per cent support, followed by the Liberals with 31 per cent, and the NDP with 20.3 per cent. The other parties trail significantly behind with the Bloc Quebecois at 6.8 per cent, the People’s Party of Canada at 4.1 per cent, and the Greens at 3.5 per cent.
In terms of who Canadians prefer for their next prime minister, Trudeau has a slight lead with 29.2 per cent support, followed by O’Toole with 28.4 per cent, and NDP Leader Jagmeet Singh at 19.2 per cent. PPC Leader Maxime Bernier has 4.9 per cent support, just ahead of BQ Leader Yves-Francois Blanchet, and Green Leader Annamie Paul.
‘IT’S HOUSING, STUPID’
The economy, and more specifically housing affordability, is also a main topic of concern for Canadians living in the vote-rich Greater Toronto Area, Nanos said.
According to polling data commissioned by CTV News and CP24 that was released on Tuesday, housing is the number one priority for voters living in Toronto and the surrounding area and one that all parties will have to address if they want to win votes there.
“More than four out of every 10 residents in the GTA unprompted, which means when they could say whatever they wanted, identify housing as their as their top concern,” Nanos said.
“What was it that one American strategist said, ‘It’s the economy, stupid’?” Nanos said. “That’s probably what GTA residents want to say to any politician from any stripe, ‘It’s housing, stupid.’”
And although Toronto and the GTA are traditionally a Liberal stronghold, Nanos said it was interesting that when residents were asked who best understands the issues in their area, it was a three-way tie between Trudeau, O’Toole, and Singh.
“That means that there’s also opportunity not just for Erin O’Toole, but for Jagmeet Singh. He’s got a good brand. His brand is exceptionally strong among under 35s in the in the GTA and if he can get young people to get out and vote, it can be a bit of a game changer for him,” he said.
NANOS’ METHODOLOGY
A national random telephone survey (land- and cellular-line sample using live agents) of 1,200 Canadians is conducted by Nanos Research throughout the campaign over a three-day period. Each evening a new group of 400 eligible voters are interviewed. The daily tracking figures are based on a three-day rolling sample comprising 1,200 interviews. To update the tracking a new day of interviewing Is added and the oldest day dropped. The margin of error for a survey of 1,200 respondents is ± 2.8 percentage points, 19 times out of 20.
The respondent sample is stratified geographically and by gender. The data may be weighted by age according to data from the 2016 Canadian Census administered by Statistics Canada. Percentages reported may not add up to 100 due to rounding.
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.
