OTTAWA, ON (June 22, 2018): With an increasingly favourable business environment in the US and the opposite trend occurring in Canada, business investment in the US is improving faster than in Canada, Munk Senior Fellow Philip Cross said today upon release of the Macdonald-Laurier Institute’s latest Quarterly Economic Report.
Amidst growing uncertainty over the NAFTA negotiations, firms are continuing to shift investment to the US. The result has been the slowing of consumer spending in Canada and a 50,000-person drop in employment during the first three months of the year.
“The return of the Canadian economy to sluggish growth is projected to continue,” writes Cross. “While the oil industry has recovered, this has been offset by continued weakness in non-energy exports and a marked slowdown in housing.”
With lagging business investment, trade uncertainty, and a cooling housing market, Canada’s real GDP growth eased to 0.3 percent in the first quarter of 2018. This is despite higher levels of government borrowing and spending.
Cross notes that Canada’s poor performance has contrasted against a booming American economy.
“The US added nearly one million new jobs, with unemployment having fallen to 3.8 percent,” writes Cross. “This can be compared with a 4.8 percent unemployment rate in Canada, with job losses being particularly noticeable in British Columbia and Ontario.”
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Philip Cross is a Munk Senior Fellow with the Macdonald-Laurier Institute. He previously served as the Chief Economic Analyst for Statistics Canada, part of a 36-year career with the agency.
Cross’s Quarterly Economic Reports provide analysis of the latest economic data and results of the Macdonald-Laurier Institute’s Leading Economic Indicator, designed to signal an upcoming turn in the business cycle, either from growth to recession or from recession to recovery, six months in advance.
The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.