Economy

Statistics Canada says economy grew 0.2 per cent in January – Ottawa Business Journal

Published

3 years ago

April 1, 2022

The Canadian economy lowered its shoulder through a surge in COVID-19 cases and plunge of 200,000 jobs in January to eke out a 0.2 per cent monthly gain, Statistics Canada said Thursday.

Goods-producing industries drove gains in January, the agency said, noting the construction sector grew for the third time in four months and the largest monthly gain in wholesale trade since July 2020.

Residential construction grew 4.3 per cent in January, which Statistics Canada said more than offset the previous two months of contractions and was the largest monthly gain since March 2021.

The same couldn’t be said for the services sector that as a whole registered zero growth in January.

Accommodation and food services, and the arts, entertainment and recreation sector each saw their largest monthly declines since the first wave of the COVID-19 pandemic in April 2020.

Statistics Canada also reported that mining, quarrying and oil and gas extraction were down for the third month in a row.

The agency said its initial estimate suggests the real gross domestic product grew 0.8 per cent in February, saying that many of the sectors down in January, rebounded a month later.

Royce Mendes, managing director and head of macro strategy at Desjardins, said after plugging away through January, the economy looks to have hit the accelerator in February as services were buoyed by the fading of Omicron and restrictions being relaxed.

Statistics Canada will finalize the February figure at the end of April.

CIBC senior economist Andrew Grantham wrote in an analysis that the surprisingly resilient January figure and early estimate for growth in February puts economic growth for the first quarter ahead of what was anticipated at the start of the year.

He now expects the economy to grow an annualized rate of four per cent in the first quarter, double the two per cent the central bank forecasted in January in its economic outlook.

But Grantham said growth through the remainder of the year is likely to be slower because of the impact of high inflation on household finances, higher interest rates in response that would slow the boom in the housing market, and potential supply chain issues stemming from Russia’s unprovoked invasion of Ukraine.

“Geopolitical conditions are forcing global trade flows to alter and countries are turning to Canada as a reliable, safe supplier of commodities,” said Tu Nguyen, an economist with the firm RSM Canada.

“What that means is that the commodity sectors, such as mining, oil and gas agricultural sectors in Canada are turning around and they are expected to be very strong this year. They have to fill this gap in the global market.”

Nguyen also said businesses like restaurants and bars hard-hit in January should rebound in the coming months as long as the economy stays open and rising costs don’t force price increases that turn away customers.

Higher costs are weighing on small and medium-sized businesses that the Canadian Federation of Independent Business warned Thursday could slow their recovery and return to pre-pandemic sales levels.

The association’s latest survey of its members noted worries about fuel and energy costs, despite results suggesting that their short-term outlook was the most optimistic since the start of the pandemic.

“It’s good to see small business owners express optimism for the future after the last two years of the pandemic,” Andreea Bourgeois, the association’s director of economics, said in a statement. “However, that does not mean they are in a good position to absorb new costs.”

It’s why the association is looking to next week’s federal budget for some relief.

Thursday’s GDP report landed one week before budget day in Ottawa, and underscores expectations that federal finances my be rosier than expected. An economy growing faster than expected could mean the Liberal government finds itself with extra fiscal room on the back of higher revenues and lower-than-anticipated spending on pandemic aid.

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

2 days ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

6 days ago

October 17, 2024

Anne Joseph

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.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

1 week ago

October 16, 2024

Anne Joseph

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.

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