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Economy

U.S., Canada, Mexico hold ‘robust’ trade deal talks, downplay differences

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Trade ministers from the United States, Canada and Mexico said on Tuesday they held “robust” talks on the new North American trade deal and pledged to fully enforce its higher standards, while downplaying differences over a range of other irritants.

The ministers, in a joint statement issued after their first meeting to review the U.S.-Mexico-Canada Agreement on trade that took effect in July 2020, also vowed to focus on fighting climate change and crack down on imports of goods to the region made with forced labor.

“The USMCA commits us to a robust and inclusive North American economy that serves as a model globally for competitiveness, while prioritizing the interests of workers and underserved communities,” the ministers said.

The statement came after U.S. Trade Representative Katherine Tai met virtually with Mexican Economy Minister Tatiana Clouthier and Canadian Trade Minister Mary Ng in the initial meeting of the governing body for the trade deal, which regulates some $1.5 trillion in annual North American trade.

Their statement described discussions on new labor and environmental obligations as “robust.”

Tai had earlier urged her counterparts to pursue strong implementation of the USMCA to ensure that it would maintain political support.

“For this agreement to be durable, it must serve the needs of everyday people – not just in the United States, but in Mexico and Canada as well. That will only happen if we deliver on our promises,” Tai said.

The USMCA replaced the 1994 North American Free Trade Agreement, adding chapters on environmental, labor and digital commerce standards and considerably tighter regional automotive content rules.

Over two days of bilateral and joint virtual meetings, the three ministers brought up long-standing complaints and ones that have cropped up over the past year, with Tai chiding Canada over a proposed digital tax and Ottawa’s allocation of dairy quotas.

Ng told reporters that she raised Canada‘s concerns about “unwarranted and unfair” U.S. lumber tariffs and vowed to defend the sector’s interests. On Monday, she brought up U.S. “Buy American” restrictions on infrastructure and public procurement projects.

Mexico raised differences between the U.S. interpretation of the USMCA’s automotive content rules and the more flexible Mexican and Canadian interpretations, said Mexican Deputy Economy Minister Luz Maria de la Mora, adding that the countries would continue to discuss the matter.

She also said Mexico asked the United States to review its ground transportation rules to ensure that Mexican truckers had access to the U.S. market – a longtime complaint from Mexico City.

TAKING STOCK

But those issues were not mentioned in the joint statement, which focused on cooperation to implement new labor, environmental and digital economy rules and reaching out to underrepresented groups.

The ministers said officials from the three countries plan to meet with small-business owners in October in San Antonio to promote inclusion in USMCA’s benefits.

“This was primarily an opportunity to take stock of the new agreement, think about how it works, and … lay out the priorities of the three countries,” said a senior U.S. trade official, adding that further high-level meetings would likely take place in coming years. Although the USMCA did not include a climate-change chapter at the insistence of the Trump administration, the official said Tuesday’s talks included substantial discussion of climate-change matters. The United States highlighted the importance of labor issues during the meetings, and said Mexico’s response to a potential labor rights violation associated with a union contract vote at a General Motors Co truck plant in the central Mexican city of Silao showed “how well this can be used by both countries.”

(Reporting by David Lawder and Andrea Shalal; Additional reporting by David Ljunggren in Ottawa and Sharay Angulo in Mexico City; Editing by Dan Grebler and Peter Cooney)

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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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 Press. All rights reserved.

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Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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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.

The Canadian Press. All rights reserved.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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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.

The Canadian Press. All rights reserved.

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