The main risk underlying the Canadian economy has shifted from high inflation to high unemployment and slowing growth. The government’s recent restrictions on immigration reflect its attempt to respond to these shifting dynamics. But while these restrictions could temporarily curb unemployment and ... READ MORE >
Canada’s job market continued to cool in August
The data in Canada's labour survey for August paints a picture of a cooling job market as the economy added a mere 22,000 jobs and the unemployment rate rose to 6.6 per cent. The employment rate rose 0.1 percentage points to 60.8 per cent. More rate cuts are needed, and it will take time for the recent ... READ MORE >
Bank of Canada cuts its policy rate to 4.25 per cent
The Bank of Canada reduced its overnight rate to 4.25 per cent amid cooling inflation and soft growth. The central bank's dovish statement went so far as to indicate that more rate cuts are coming as inflation continues to decline toward the 2 per cent goal next year. Now, with unemployment rising in a ... READ MORE >
With higher capital gains tax rate, Canada renews debate over growth
For nearly a quarter century, Canada’s capital gains tax rate has remained largely the same, at 50 per cent. But that changed this year when the federal government, in its current budget, called for the new inclusion rate to be set at 66.7 per cent. While the move might help the government boost ... READ MORE >
Canada’s rail strike disrupts supply chains
Canada’s rail work stoppage could disrupt Canada’s supply chains, costing billions of dollars and tens of thousands of jobs. Supply chain snarl could also put upward pressures on prices just as inflation returns to 2.5%. But on a broader scale, the impact would be minimal and short-lived if workers ... READ MORE >
Canada’s inflation fell to 2.5 per cent, solidifying case for rate cut
Canada’s consumer price index fell to 2.5 per cent in July, the lowest level since March 2021, solidifying the case for the Bank of Canada to cut its policy rate this month. The disinflation was broad-based and included components from food to recreation and, most notably, shelter. All measures of ... READ MORE >
Canada’s weak job market supports further rate cuts
Canada’s July jobs report spelled out the need for more rate cuts as the economy shed 2,800 jobs, according to data released Friday by Statistics Canada. The unemployment rate stayed steady at 6.4% as labour force participation fell in a challenging market. Some youth and women had stopped looking for ... READ MORE >
Bank of Canada reduces rate to 4.5 per cent amid disinflation
There was little surprise in the Bank of Canada’s announcement on Wednesday when the central bank reduced its policy rate by 25 basis points to 4.5 per cent. The tone of the central bank's statement was notably dovish and marked a departure from a hawkish or cautionary tone that persisted over the past ... READ MORE >
Digital transformation and Canada’s public sector
With Canada’s economy mired in a slowdown, its stagnating productivity has increasingly become a drag on growth. Nowhere is this more evident than in the public sector, which makes up a significant portion of the economy yet remains plagued by archaic systems that hamper service delivery and hold back ... READ MORE >
Canada’s CPI in June shows disinflation and suggests rate cut
June’s inflation report in Canada confirms that the economy is on a disinflationary trajectory as headline inflation dropped to 2.7% because of slower growth in gasoline prices. On a monthly basis, the consumer price index fell by 0.1% after a 0.6% increase in May. On a seasonally adjusted monthly ... READ MORE >