is canada heading down a slippery slope - november 26, 2016
TRANSCRIPT
By: Paul Young, CPA, CGADate: November 26, 2016
Is it Canada heading down a slippery slope – Government Policies – November 26, 2017
• This presentation looks government policy that could have impact on both FDI as well as income in Canada
Presentation
• Summary
• Carbon Taxation and GDP Growth
• Business Climate
• Retail Sales
• Trade
• Housing Market
• Labor Market
Agenda
• Canada is one of the best country to live in the world - http://globalnews.ca/news/2465526/canada-named-2nd-best-country-in-the-world-report/• So, how are Trudeau’s policies that relate to hiking CPP or
refugees or carbon taxation going to make Canada even better in terms of living for Canadians
Summary
GDP Growth and Carbon Taxation
Source – Scotiabank
Economic impact:• The Greenhouse Policy Coalition (GPC), representing New Zealand’s
energy intensive sector, says while the Government has to introduce policies aimed at reducing greenhouse gas emissions, a carbon tax is not the best policy option because it has the potential to hurt the New Zealand economy and will not necessarily result in significant emission reductions. Source - http://www.gpcnz.co.nz/Site/News_Releases/Archive/Carbon_tax_will_hurt_economy.aspx
• Energy makes modern society possible. It lights the night, heats our homes, powers our entertainment, and most importantly, it helps us conserve the ultimate non-renewable resource—time. Energy amplifies our ability to do work. Machines help autoworkers assemble cars, power tools help construction workers build our homes, gasoline-powered automobiles help us take care of our families, diesel-power trucks distribute fresh produce across the country, and electricity-powered computers give us unprecedented access to information. But the energy that supplies 85 percent of our needs—coal, oil, and natural gas—are under attack. Politicians and special interest groups are proposing various methods to tax these abundant and reliable sources of energy. Source - http://instituteforenergyresearch.org/studies/carbon-tax-primer/ • So, why is Justin Trudeau pushing carbon taxes?
http://www.huffingtonpost.ca/2016/10/05/trudeau-carbon-tax-conservatives-_n_12362222.html
• Canada is top jurisdiction for FDI – Source - http://www.investinontario.com/spotlights/kearney-reports-worlds-most-attractive-destinations-foreign-direct-investment
• Canada business taxes are low compared to other G-7 and G-20 countries - https://home.kpmg.com/ca/en/home/media/press-releases/2016/07/canada-maintains-top-spot-as-the-most-tax-competitive-country-for-business-globally-kpmg-study.html• So, why is Justin Trudeau and his government bent on doing the
following:• Raising CPP payments from business and employers• Self imposing a carbon tax• No integrated strategy with the provinces when it comes to natural
resources development and the curbing of hydro rate• No skills development training program
Canada business Climate
Retail Sales Drive the economy
Key Facts• 2/3 of the economy in Canada is driven by consumer spending• Big ticket spending like renovations, cars and appliances can lead to household debt issues
Issue at hand• Carbon taxation will hit people’s pocket book at about $1,200 to 2,400 a year. This means less money left over for
consumer spending• The taxation cut to middle class did not bump up retail sales. Many Canadians are dealing with provincial policies
like hydro rates.• The new family tax benefit is only about $7 per month more than the CPC family tax benefit
Source: Stats Canada
International Trade
Key Facts• Exports are about 1/3 of GDP. Canada depends on exports• For each $1B in exports there are 5,500 jobsIssue at hand• United States new government. Trump does not like TPP. • Canada needs to expand FIPA and Trade deals to emerging markets like India, South-East Asia, Africa as well as
other markets• Federal government needs to speed up the approval process for pipelines• Provincial governments need to develop more of their natural resouces• Federal government needs to partner with provinces and private sector to expand bridges, roads and ports.
Source: Stats Canada
Summary – Canada Real Estate – October 2016• Canadian housing starts pulled back to 192,900 annualized units in October from 219,400 in
the prior month, roughly in-line with expectations. Both urban multi-unit and single-unit starts were down in the month, and almost all regions of the country but Ontario pulled back
• British Columbia is the big story, with starts falling sharply to 27.6k after pushing record levels (north of 50k at one point) earlier in the year. October’s tally brings activity back down to the very stable (and fundamentally supported) range seen between 2010 and mid-2015
• In a separate report, Canadian building permits fell 7.0% in September, with lower non-residential activity outweighing a modest gain on the residential side. The bigger picture is that non-residential activity continues to fade, while government activity is still holding relatively stable.• So, how are new mortgage rules going to benefit the housing market, especially for
millennials?
Source – BMO
Post – Secondary Enrolment by Field of Study
Graduates
Commentary:• Canada is producing 500K to 516K grads
per year as compare to the job market which is only creating 200K in new jobs
• Declining enrolment is impacting education
• Healthcare cutbacks are forcing the elimination of healthcare jobs
• Canada is export driven economy. Exports need to expand to new markets. For each $1B in exports is 5,500 jobs
• Retail Channel is evolving to more eCommerce.
• There is a skills gap. Education has not align to jobs in areas like advance manufacturing, Cybersecurity, Analytics, Expert Farming, etc
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