Canada economy October 2023-

Competition Bureau Canada

Competition Bureau report finds Canada’s competitive intensity in decline
Today, the Competition Bureau published the findings of an in-depth study ꟷ Competition in Canada from 2000 to 2020: An Economy at a Crossroads ꟷ which tracks a decline in Canada’s competitive intensity over the last two decades.
The study is the first of its kind in Canada to provide a comprehensive analysis of indicators of competition across the Canadian economy. (19 October 2023)

[Doug Porter] BMO chief economist reveals the ‘new villain’ of Canadian inflation
(Globe & Mail) “This is basically the story of the housing unaffordability crisis in one chart. Rents have exploded higher by 8.2 per cent year-over-year in the past 12 months, the fastest pace since 1983. (Recall, a month ago we said that rents are the new villain in the inflation saga.) That’s about 7 percentage points faster than the average annual increase in the 20 years prior to COVID. More importantly, the rise in rents is now far outpacing the underlying trend in personal income. Over the past five years, disposable income per person has perked up to a 3.9-per-cent annualized pace. That’s actually been a touch above average overall inflation over that period (of 3.4 per cent). But it is now miles below rent inflation. This is the first time in 60 years of records that income growth has trailed behind rents—and it’s not even close.

22 November
The Liberals’ new definition of restraint: overspending by less than they had previously
Andrew Coyne
Every time the Liberals update the country on the state of its finances, it is accompanied by pages of prose trumpeting the government’s devotion to fiscal restraint. And yet, every time, spending somehow ratchets higher.
Over the years this contradiction has required ever more creative arguments to conceal. This time around the line is that, although spending is higher, deficits are higher and the debt is higher – tens of billions of dollars higher – than projected in the budget eight months ago, they are not as much over budget as they were expected to be.

21 November
2023 Fall Economic Statement: Outrunning the Hard Rain
Kevin Page, President of the Institute of Fiscal Studies and Democracy at the University of Ottawa, former Parliamentary Budget Officer
(Policy) There are few new announcements of fiscal significance. Times are tough. The economy is not growing and unemployment is rising. Expect more of the same in 2024. Freeland is also telling Parliament and Canadians that the government is doing a lot to address affordability and housing supply shortages, even if it feels like they are falling short.
But the fiscal plan is caught between a rock and a hard place.
Traditionally, when governments face economic slowdowns, ministers of Finance will allow the deficit to grow. A loosening of the belt is considered prudent (P.S., many observers do not think the Liberal government has a belt in its wardrobe). A weaker economy means fewer- than-expected revenues and more spending for employment insurance. Conceptually, fiscal restraint in a slowing economy can make things worse. We want governments to stabilize unstable economies. Times are changing. Hell, times are already worse. Call it inflation and the need to lower high interest rates before a soft landing for the economy gets hard.
Six highlights from the fall economic statement as Canadians struggle with affordability issues
The federal government unveiled its 2023 fall economic statement on Tuesday, with promises of new spending to help build affordable homes, support renters and clamp down on Airbnbs.
Federal efforts to solve Canada’s housing crisis are but a drop in the bucket
Craig Alexander has served as chief economist at Deloitte Canada, the Conference Board of Canada and Toronto-Dominion Bank.
(Globe & Mail) It’s hard not to be cynical about the federal government’s housing policy and its ability to resolve Canada’s housing affordability crisis. In 2017, the federal government announced Canada’s National Housing Strategy: a 10-year plan to help improve affordability, availability and quality of housing. Yet six years later, housing affordability has worsened.

10 November
How Canada – and Bay Street – squandered the chance to finance the critical minerals revolution
Capital has disappeared from Canada’s once-thriving junior mining industry. Badly-burned investors are scared to touch the sector, and companies are barely treading water
While financings for all sectors are slow this year because investors are recalibrating after the COVID-19 pandemic tech bubble popped, mining has lost its lustre in the Canadian market. There are fewer investment banks providing research coverage of up-and-coming mining companies, and fewer investment advisers paying attention to the sector. When a junior company tries to raise money, there just aren’t as many people willing to listen to the sales pitch.
The struggle to finance terrifies politicians and diplomats because Canada and the United States are losing the global critical minerals war. “Simply put, we don’t have enough of these minerals today to meet the world’s – and our own – growing demand,” David Cohen, the U.S. ambassador to Canada, said in an October speech.
The worry is that China is hoovering up critical minerals and will use them against the West in a geopolitical provocation, the same way Russia held its natural gas supply over Europe’s head when it attacked Ukraine. Currently, China refines more than half of all nickel, lithium and cobalt worldwide.

9 November
Government of Canada to release the 2023 Fall Economic Statement on November 21, 2023
The Fall Economic Statement will provide information on the state of the Canadian economy and update on the government’s economic plan to help create good jobs, to build more homes, and to make life more affordable.
Can Mark Carney save Justin Trudeau?
By Max Fawcett
(National Observer) As the former governor of the Bank of Canada and the Bank of England, Mark Carney brings a level of economic sophistication few can match. Is it the right fit for the moment, though?

31 October
Canada’s economy stalls in August, seen slipping into recession in Q3
By Ismail Shakil and Steve Scherer
(Reuters) – The Canadian economy stalled in August and likely slipped into a shallow recession in the third quarter, data showed on Tuesday, a sign the central bank’s 10 interest rate hikes since last year are weighing on growth.
With the economy stumbling along slower than the Bank of Canada forecast just last week, analysts said there is no need to raise rates again from 5.0%, a 22-year high. The Canadian dollar was trading lower, near its weakest level in a year.