Canada – Slow Growth – Liberal Party of Canada – December 2016By: Paul Young, CPA, CGADate: December 7, 2016

Presentation• This presentation will look at slow economic growth in Canada.

The presentation will discuss liberal policies as well as macro and micro indicators when it comes to areas like wages, retail sales, trade, manufacturing sales, employment and housing prices.

• The presentation will also reflect 3rd part comment that relate to GDP, debt, housing prices, trade as well as other areas of the economy

Agenda• GDP Growth• Employment• Housing • Retail Sales • Manufacturing Sales• Trade

GDP Growth / Canada – Liberal Party of Canada

Source: Stats Canada and Scotiabank

Source – ScotiaBank – Monthly Forecast – November 20163Q16

2Q16

Source – ScotiaBank – Monthly Forecast – September 2016

1Q16

Source – ScotiaBank – Monthly Forecast – July 2016

http://www.oecd.org/economy/canada-economic-forecast-summary.htm

November 28, 2016 Comments: A Dec. 5 slide show, obtained by CBC

News, projects weak annual growth of just 1.8 per cent on average until 2029, and cites full-time job losses of 1.9 per cent across Canada so far this calendar year.http://www.cbc.ca/news/politics/finance-liberals-economy-budget-morneau-consultations-jobs-1.3883770

Employment/Wages

Minister of Finance – Bill Morneau Comment: “Finance Minister Bill Morneau says Canadians should get used to so-called “job churn” – short-term employment and a number of career changes in a person’s lifeSource - http://ipolitics.ca/2016/10/22/get-used-to-job-churn-morneau-tells-liberal-meeting/

Source: Stats Canada

Liberal Election PromiseComment: After ten years under Stephen Harper, good-quality job opportunities for young Canadians are tougher and tougher to find. Faced with high unemployment and underemployment, many young people have stopped looking for work altogether.

https://www.liberal.ca/realchange/opportunities-for-young-canadians/Job Quality In a report released today, the national statistics office says fewer young Canadians, who are not full-time students, are working in full-time jobs today than in 1976, a result driven mainly by the rise of part-time work rather than increases in unemployment rates or decreases in labour force participation.Source - http://www.cbc.ca/news/business/wages-cibc-job-quality-1.3872389

Government of Canada cites full-time job losses of 1.9 per cent across Canada so far this calendar year. http://www.cbc.ca/news/politics/finance-liberals-economy-budget-morneau-consultations-jobs-1.3883770

Wages

Source – Stats Canada

• Wages are under pressure in Manufacturing

• Retail/Wholesale wages have grown due to more focus on distribution, i.e. eCommerce – Note – Stats Canada decided last fall to combined retail sales data with Wholesale. Wholesale/Warehouse tend to pay more than retail sales clerk

• Government wages may reflect arbitration settlements.

• Key Quote “In response to widespread uncertainty about Canada’s economic climate and business conditions, organizations are planning cautious salary increases for 2017. The Conference Board of Canada’s Compensation Planning Outlook 2017 projects average base increases for non-unionized employees to be 2.2 per cent next year, with the lowest increases going to workers in Alberta and in the oil and gas industry.Source - http://www.conferenceboard.ca/press/newsrelease/16-10-26/canadian_workers_in_for_another_year_of_modest_salary_gains_amid_slow_economic_growth.aspx

Liberal Election Platform:

• Trade is vital for our economy. It opens markets, grows Canadian businesses, and creates good-paying middle class jobs – jobs that pay wages that are 50 percent higher than industries that are not export intensive. That is good news for the middle class and the communities they call home.

• Stephen Harper’s approach to trade, however, has failed. His Conservative government has recorded the largest trade deficit in Canadian history, and Canadians are paying the price in lost job opportunities.

• Source:https://www.liberal.ca/files/2015/10/New-plan-for-a-strong-middle-class.pdf

Housing Prices

Source – Scotiabank

Moodys:According to the report, Canadian detached single family house prices are expected to increase by nine per cent this year, and by 2.9 per cent annually over the next five years. Meanwhile, condominium prices are forecast to grow by 4.6 per cent this year, and 2.2 per cent per annum over the next five years.Moody's does caution that some metropolitan areas will see "modest" near-term price declines. Prices in Edmonton are expected to trend slightly lower, despite an expected rise in oil prices. Saskatchewan and Newfoundland housing markets are in for "a rough two years," Moody's said, citing a combination of overvaluation and slow projected economic growth.• Source - http://www.cbc.ca/news/business/house-prices-moodys-

1.3810209

Government comment:The slide show also notes that productivity is slowing, energy-sector investment is in sharp decline, and household indebtedness is at record levels.Source - http://www.cbc.ca/news/politics/finance-liberals-economy-budget-morneau-consultations-jobs-1.3883770

OECD warns Canada at risk of ‘disorderly’ housing correction• Canada is at risk of a “disorderly” correction in the housing market

that could threaten the country’s financial stability, the OECD warned on Monday in its latest global economic outlook.

• The risk of a housing correction is most acute in the “over-valued” Vancouver and Toronto markets, the Organisation for Economic Cooperation and Development said, citing the potential difficulty for some debt-ridden households to make mortgage payments if interest rates or unemployment rise. Source - http://www.bnn.ca/oecd-warns-canada-at-risk-of-disorderly-housing-correction-1.618243

Retail Sales

Source – Stats Canada

• Retail sales have been sluggish since February 2016

• The tax cuts and changes to family tax benefit payments have had little impact on retail sales

• Family budgets are under pressure due hydro rates, carbon tax (BC) as well as other taxes

Government comment:The slide show also notes that productivity is slowing, energy-sector investment is in sharp decline, and household indebtedness is at record levels.Source - http://www.cbc.ca/news/politics/finance-liberals-economy-budget-morneau-consultations-jobs-1.3883770

Manufacturing Sales• Transportation sales are closed

to 9B for 2016) • Forestry sales are led by a

strong domestic and international demand for lumber (Housing starts)

• Oil is off close 10B in 2016• Manufacturing sales is flat with

2015 Issues:• Softwood dispute has not be

resolved• Slower retail sales led by lower

demand for autos• Manufactures are under cost

pressure due to hydro costs, regulatory burden and access to market.

• Less investment in both innovation and capital equipment

Source – Stats Canada

Government comment:The slide show also notes that productivity is slowing, energy-sector investment is in sharp decline, and household indebtedness is at record levels.Source - http://www.cbc.ca/news/politics/finance-liberals-economy-budget-morneau-consultations-jobs-1.3883770

Trade

MP – Ralph Goodale – Liberal Party of Canada

Comment: As a consequence, Canadians are stuck with $158-billion in new Harper debt -- without much to show for it. There are 160,000 more jobless Canadians today than before Mr. Harper took power. Job quality is at a 25-year low. Household debt is near a record high. Canada's trade deficit this year has topped $13-billion. Business and consumer confidence are down.

http://www.huffingtonpost.ca/ralph-goodale/mr-harpers-economic-recor_b_8020980.html

Stats Canada

Stats Canada Canada is on pace for $33B trade imbalance for 2016.

http://www.statcan.gc.ca/daily-quotidien/161206/dq161206a-eng.htm

Summary

• Canada’s economy is still struggling with sluggish growth• Employment has seen more part-time jobs than full-time created in 2016• Housing prices continue to grow faster than wage growth, inflation and GDP• More and more countries are imposing more protectionism policies. Exports are about $520B or about ¼ of GDP.

Canada depends on exports as part of driving the Canadian economy. Lower exports will impact the tax revenue collected by the government

• Government has approved a major pipeline. There are more pipelines/projects waiting for approval. Delay in approving projects could influence future FDI

• Infrastructure spending funding has been slowed.• Liberal government has decided to impose carbon taxation on all provinces

• Imposing carbon taxation/price for carbon could have the following impact• Lead to slower growth as it will increase costs of goods for consumer by about 6-9% or about $2,500 to family budget -

http://www.slideshare.net/paulyoungcga/what-is-carbon-tax-or-a-price-for-carbon • Make exports more expensive. Many Canada largest trading partners like the United States do not have carbon taxation/price for carbon.