Economic Scorecard – Canada – 3Q16

Paul Young | Paul Young CPA, CGADate: November 25, 2016

Presentation DescriptionThis presentation will look at the 3Q16 economic trends

for Canada

Agenda GDP Forecast Key Industry Indicators Employment Wages Housing Market Retail Sales Canadian Manufacturing Sales Canada Exports Government Annual Report Truth and deficits and surpluses

GDP Forecast

Source – Scotiabank

Key Indicators (base on volume, counts)

Source – BMO, Association of Equipment Manufacturers, World Steel Institute and Baker Hughes

Canada Employment

Comments:• There 64K less goods producing jobs as compare to December 2015. Low commodity prices have impacted oil/gas as well

as the mining sector• Service sector jobs lead the way which bulk of the hiring in areas like healthcare and public administration• Part-time jobs are leading the way in terms of new jobs.

• Liberal comments “At a recent meeting of Liberal Party insiders, the finance minister said government must do a better job of adapting to the changing workplace. Morneau suggested precarious work is here to stay, and that Canadians and their governments better get used to it. source - http://spon.ca/bill-morneau-is-half-right-about-precarious-labour/2016/10/30/

Canada Employment

Comments:• Wage growth has been very sluggish in 2016• Cut backs to healthcare have impacted wages• Many governments have hiring freezes and/or wage freezes

• Liberal comment - Wages are based on market conditions. If government impose carbon taxation and/or CPP hikes then that will influence what business can afford to pay to their employees Source - http://www.rcinet.ca/en/2016/03/09/guaranteed-income-coming-to-canada/

Housing Market Comments:• Housing prices are growing

at a 6-8% growth rate as compare to GDP (1.2%) or Inflation (1.9% or wage growth (0.4%) – How are housing prices sustainable?

• Liberals imposed new rules to mortgages - http://www.bnn.ca/mortgage-lenders-swamped-as-homebuyers-race-to-beat-new-stress-test-rules-1.585079

• There are systemic issues with housing - http://www.slideshare.net/paulyoungcga/real-estate-trends-and-analysis-canada-october-2016

Retail Sales

Stats Canada

Commentary:• The liberals family tax benefit and

tax cuts to middle class have not help retail sales

• New carbon taxation rules for Ontario and Alberta will impact retail sales. It could carbon tax could cost the family household $2,500 year

• Automotive has led the retail sales for 2016.

• Household debt continues to rise - http://business.financialpost.com/news/economy/canadas-household-debt-is-now-bigger-than-its-gdp-for-the-first-time

Canada Manufacturing Sales

Stats Canada

Commentary:• Transportation sales are close

$11B higher than 2015.• Forestry sales are up. However,

the softwood lumber dispute has not been resolved - http://www.cbc.ca/news/politics/softwood-lumber-dispute-investigation-commerce-dept-1.3866975

• Food manufacturing has also had a good year

• Energy related products have rebounded the past two months. However, low commodity prices are still a drag on oil and gas sector

Canada Exports

Stats Canada

Commentary:• Oil exports have rebounded in

3Q16• There has been a drop $3B in

exports related to consumer goods.

• Capital equipment spending has been flat in 2016.

• Canada has been running trade imbalances throughout 2016.

Liberal Spending – Foreign Aid Funding to Hamas restored ($25M) - http://www.cbc.ca/news/politics/unrwa-funding-palestinian-restored-1.3852779 Funding to Haiti ($54M) - http://ipolitics.ca/2016/11/18/trudeau-government-unveils-54-million-aid-package-for-haiti/ Funding to Liberia ($12.5M) - http://en.cijnews.com/?p=61273 While attending the XVI Summit of La Francophonie in Madagascar, Prime Minister Justin Trudeau announced on Sunday,

November 27, 2016 that the Canada will provide $112.8 million for international aid projects that will benefit several African countries and Haiti. According to the official statement, this funding will: “contribute to projects that aim to fight climate change, empower women, and protect their rights” “will be used to stimulate economic growth, which will create job opportunities for young people and women, and to counter terrorism and

prevent radicalization.” Source - http://en.cijnews.com/?p=62874

Overseas funding ($3B) - https://www.libertarian.ca/wastewatch Re-settlement of Syrians ($245M) -

http://www.theglobeandmail.com/news/politics/liberals-to-spend-245-million-to-resettle-government-assisted-syrian-refugees/article29351512/ Summary

Money is spent over a period of time.

Liberal Party of Canada – Annual Report 2015-2016

Indigenous Affairs - http://news.nationalpost.com/news/canada/canadian-politics/liberals-left-900-million-unspent-last-year-at-indigenous-affairs

Feds spent $296.4-billion last year, left more than $12-billion unspent, ... it means there may be objectives the government had that have not been met. ... The Treasury Board tabled the 2015-16 public accounts, which detail all federal finances, late last month. ... All you need to know about marijuana legalization in Canada. - https://www.hilltimes.com/2016/11/07/public-accounts-reflect-296-4-billion-spending-higher-projected-lapse/86553 Summary

Lapsing funds are used by government as part of their fiscal management cycle Liberal Comment “We are in deficit right now, Mr. Harper has put us into deficit this year,” Trudeau said Monday. “As for last

year’s numbers, we know, and we saw Mr. Harper under-spending and making cuts to Veterans Affairs, Aboriginal Affairs, to seniors, in the billions of dollars so that he could balance the books in time for his election.” source - http://globalnews.ca/news/2222185/reality-check-trudeaus-claim-harper-slashes-funding-to-balance-budget-falls-flat/

Harper has $1.9 surplus when he left office - http://www.fin.gc.ca/n15/15-078-eng.asp

Truth about the Surplus/Deficit Liberals and there followers need to be reminded that Harper left

surpluses before his team left office. The first surplus was from 2014-2015 - 

http://www.slideshare.net/…/government-deficit-and-debt-can… The second surplus was through to December 2015 - 

https://www.fin.gc.ca/fiscmon-revfin/2015-12-eng.asp Liberals are great at using the media as way to hide facts from the

public eye

Appendix Contact

Paul_Young_CGA@Hotmail.com