The Canadian economy: an overview

Despite the shrinking economy, the Canadian dollar remaining relatively low should give incentive to domestic manufacturers which can hopefully create jobs that have been phased out as well as stimulate Canada’s oilpatch with relatively low commodity pricing.

  • On average, Canada spends approximately $2 trillion in any given fiscal year.
  • In 2015, Domestic product fell 0.2 percent in May to under $1.6 billion marking five months of straight decline.

Canada’s oil and gas sector continues to struggle due to the weakening of China’s economy and diminishing demand for Canadian oil. In May, the sector shrank one per cent, and prior it dropped 3.4 per cent in April.

  • Manufacturing fell nearly 1.7 per cent as multiple products produced in Canada continued to experience a falling demand.
  • At the end of the second quarter of the Canadian fiscal year, merchandising exports rose 6.3 per cent to $44.6 billion.
  • Imports fell 0.6 per cent to $44.5 billion as well as merchandise mostly due to a weakened American consumer and the failing value of the loonie causing the cost of American goods to rise.

Ontario has seen many employment cuts with plant closures and mass layoffs in factories due to the shrinking economy. This was very apparent in the oil sector which cut nearly a million jobs since 2014.

Despite the shrinking economy, the Canadian dollar remaining relatively low should give incentive to domestic manufacturers which can hopefully create jobs that have been phased out as well as stimulate Canada’s oilpatch with relatively low commodity pricing.

While technically Canada has seen two consecutive quarters of declining GDP growth, leading critics to claim we are in another recession, several economists have stated that Canada is still creating jobs, despite the massive hits to employment in both Alberta in Saskatchewan, again mostly in oil.

Nick Exarhos of CIBC Economics stated in an interview that, “Despite a cooling in the economy during the first half, the trend in the labour market isn’t yet pointing to Canada being in recession”.

“The six-month trend in overall employment gains stands at 11,000, far from pointing to a massive wave of job losses that are typical during broader economic downturns.”

While Canada is clearly being hit by a recession, when compared to past recessions, it seems as though we are not entirely doing too bad. The recession of the 90s saw massive rises in unemployment and other aspects of the economy and was much more widespread in scope when compared to 2015 which is mainly focused in specific regions dependent on oil.

Money 6

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