Liberal Leader Justin Trudeau faced broadsides for his government’s efforts to make housing affordable and his handling of the economy that contracted just ahead of the election call.
Affordability has already emerged as a key election talking point among the major parties, and it landed back on the campaign trail alongside the economy on Tuesday.
Statistics Canada reported the economy contracted at an annualized rate of 1.1 per cent between April and June, and estimated another drop in real gross domestic product in July.
Speaking in the Ottawa suburb of Kanata, Trudeau said there are pockets of the economy that remain weak, pointing to arts and culture as an example, even as he argued the economy overall was roaring back.
It’s why, he said, emergency supports have dropped in value, even though the Liberal government extended their lifespan through the fall because of weaker-than-expected economic indicators.
He also argued that Conservative plans for child care, among other proposals, would hurt the pace of the economic recovery if women aren’t able to enter the workforce in greater numbers.
Trudeau didn’t directly say if he foresaw a time, if re-elected, that he may have to adjust federal spending to prevent spiralling deficits.
After eking out a gain in June to end the second quarter of the year, the economy appears to have contracted in July and left overall economic activity about two per cent below the levels seen prior to the pandemic in February 2020.
Speaking in Ottawa, O’Toole said the figures show the country is “heading further down the road of recession, not the road of recovery” under the Liberals, vowing to wrangle deficits over a decade to balance the books.
Pressed for details on where he would cut spending, O’Toole said he wouldn’t cut at all and suggested something the Conservatives have long hammered Trudeau over — that the budget would balance itself.
“We will grow the economy so that we can get back to balance in a responsible and equitable way without cuts. That is our plan,” he said.
Experts say when the economy is good, or perceived to be going in the right direction, voters are inclined to reward the incumbent government. If voters feel the opposite, they are inclined to punish the incumbent.
Perceptions of the economy often come down to what individuals see in their day-to-day lives, such as whether businesses in their community are opening or closing, and how their peers are faring financially.
In Coquitlam, B.C., NDP Leader Jagmeet Singh looked to capitalize on that by outlining his plan to increase the capital gains tax on house flippers as a plank in making housing costs more affordable.
Statistics Canada noted Tuesday that Canadian households took on $84.2 billion more in mortgage debt over the first half of 2021, adding to the $62.3 billion in the last half of 2020 as the housing prices soared amid low supply, high demand, and rock-bottom interest rates.
A cooling housing market was part of the reason why the economy didn’t fare as well as expected over the last few months, but Singh argued his plan wouldn’t further affect long-term growth.
“It’s about the type of economic growth that we want,” he said.
“We don’t want economic growth to be driven by rich investors that want to make profit off of housing, or foreign investors that see an opportunity to invest in our Canadian housing market, driving up the cost of housing for Canadians who can’t afford a home.”
Also causing problems with the economy were supply-chain issues that don’t yet look to have abated.
Green Leader Annamie Paul proposed to cut down on food imports by one-third and replace them with more domestic production, which she said would help rural economies and improve food security.
“An overreliance on global supply chains will necessarily mean that there is a compromise, there is a threat to our sovereignty and our national security,” she said in Toronto.
The dual attacks on Trudeau from Singh and O’Toole landed as a new poll suggests Conservatives and New Democrats have momentum heading into the second half of the federal election campaign, while the Liberals are bleeding support.
Thirty-four per cent of decided voters who took part in the Leger survey said they support O’Toole’s Conservatives — ahead of the Liberals and up four percentage points since Aug. 16, when the campaign got underway.
Support for Singh’s New Democrats is also up four points, to 24 per cent, support for Trudeau’s Liberals is down five points to 30 per cent, and Green party support is down three points to two per cent.
In Quebec, support for the Bloc Québécois stands at 29 per cent, behind the Liberals at 33 per cent.
The online poll of 2,005 Canadians, conducted Aug. 27 to 30 in collaboration with The Canadian Press, cannot be assigned a margin of error because internet-based polls are not considered random samples.
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.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
