OTTAWA — Better-than-expected growth in November pushed the Canadian economy above pre-pandemic levels for the first time in nearly two years, but the Omicron surge in COVID-19 cases is expected to deal it yet another setback to start 2022.
Statistics Canada said Tuesday that real gross domestic product grew for a sixth straight month in November, as it posted a monthly gain of 0.6 per cent to bring it 0.2 per cent above pre-pandemic levels recorded in February 2020.
The growth fizzled though to end the year as the agency said its initial estimate suggests real GDP in December was essentially unchanged.
However, BMO chief economist Douglas Porter said the weakness could be short-lived.
He pointed to growth in November despite devastating flooding in British Columbia, and that the economy looks to have held its ground in December despite Omicron.
“We know that the economy can come back pretty quickly when things reopen,” Porter said.
“So, provided this latest, slight reopening that we’re seeing here at the start of February lasts, I would anticipate a pretty nice rebound in the economy through the rest of the quarter.”
The statistics agency also said its initial estimate is that the economy grew by 4.9 per cent for the full year. The result, which won’t be finalized until next month, is a turnaround from 2020 when the Canadian economy suffered its worst year on record as output shrank by 5.4 per cent.
Driving to the finish line of 2021, Statistics Canada estimated the economy grew at an annualized rate of 6.3 per cent in the fourth quarter, which, if it holds up, would mark the fastest quarterly growth last year.
Gains in November were seen in wholesale trade, which saw its largest monthly growth since July 2020, and manufacturing.
There was also growth in the finance and insurance sector that Statistics Canada attributed to atypically high trading activity in November as investors moved funds to safer assets because of the uncertainty linked to Omicron when it first emerged.
Accommodation and food services also saw increases in November with more travellers and looser restrictions on capacity limits in bars and restaurants in Ontario and Quebec.
Canada’s men’s soccer team also helped strike an economic gain: Statistics Canada said the two World Cup qualifying matches in Edmonton in November, one of which Canada won 1-0, helped grow the arts and entertainment sector by 5.4 per cent.
Tu Nguyen, an economist with consulting firm RSM Canada, said the high vaccination rate across Canada has helped the recovery.
“That allowed us to fill up arenas, and theatres, and hotels, and restaurants, and we saw a significant uptick in in-person activity,” Nguyen said.
Despite the growth for restaurants and sporting events, Stephen Brown, senior Canada economist with Capital Economics, noted the arts and entertainment sector was 20 per cent below pre-pandemic levels, and accommodation and food services still far from its February 2020 mark.
The Bank of Canada warned last week that it expects Omicron to dampen spending in the first quarter, and slow growth to an annualized rate of about two per cent.
Whatever economic growth the country loses in the first quarter will be pushed to the second quarter of 2022, Nguyen said.
Despite an expected contraction in January, Royce Mendes, managing director and head of macro strategy at Desjardins, said he expects the central bank to look at the strong end of 2021 and go forward with a first rate hike in March.
This report by The Canadian Press was first published Feb. 1, 2022.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
