Economic and Fiscal Update 2019: Text Version
Chart 1.1b
This chart illustrates the unemployment rate and the labour force participation rate of individuals 25-64 years old. It shows that, since 2016, the unemployment rate has declined, while the participation rate has risen.
Chart 1.2a
This chart tracks the evolution of world trade, industrial production, and business activity since early 2016. The chart shows an acceleration in world trade, production and business activity through early 2018. After early 2018, growth begins to slow for the three indicators and even turns negative for world trade after early 2019.
Chart 1.2b
This chart illustrates policy interest rates for four central banks, from January 2016 to December 2019: the Bank of Canada, the U.S. Federal Reserve, the European Central Bank and the Bank of Japan. Policy rates remained essentially unchanged at very low levels for Japan and the euro area over this period. For Canada and the U.S., policy rates increased gradually between late 2016 and late 2018. While the policy rate in Canada has held steady, the policy rate in the U.S. has since retreated by 75 basis points.
Chart 1.3a
This chart breaks down Canadian GDP growth into two components, that is, labour productivity and employment. It shows that the declining trend in the contribution of employment observed over the past few decades is expected to accelerate and even turn negative in coming decades. Holding productivity growth, which has also been slowing, constant at its 2010s level will result in a GDP growth gap from current levels.
Chart 1.3b
This chart illustrates average labour productivity growth for Canada, the euro area, Japan, the U.K. and the U.S., over two periods: 2000-2007 and 2008-2018. The chart indicates that average labour productivity growth has slowed for all from the former to the latter period.
Chart 1.4b
This chart shows a breakdown of real GDP growth into two components: the mining, oil and gas and construction sectors versus the rest of the economy. It shows that both components contributed positively to real GDP growth over the 2018Q1 to 2018Q3 period. The contribution from the former turned negative over the 2018Q4 to 2019Q1 period, weighing on total growth. Total growth rebounded over the 2019Q2 to 2019Q3 period, as both components contributed positively to growth.
Chart 1.5b
This chart illustrates hourly wage growth as measured by the wage common. The chart shows that wage growth has rebounded to a level of around 3 percent, following a deceleration in wage growth in the midst of the oil price shock in 2016. This is the highest level of wage growth since 2011. The chart also shows the range of growth of the individual measures used to create the common series.
Chart 1.6a
The chart breaks down population growth into natural increase (births minus deaths), net permanent immigration and net temporary immigration. The chart shows that population growth averaged slightly above 1% annually between 2001 and 2014. Despite a diminishing contribution from natural increase, it has since increased from around 0.8% in 2015 to 1.4% in 2018 and 2019, reflecting a steady contribution from permanent immigration and a surge in temporary immigration.
Chart 1.6b
This chart illustrates contributions to average population growth from natural increase (births minus deaths) and immigration for G7 countries. Among G7 countries, Canada has the fastest expected population growth over 2015-2020 due in large part to immigration.
Chart 1.7a
This chart illustrates the evolution of housing re-sales since January 2015 in the major markets of Toronto, Vancouver, Calgary and Montréal. In Toronto and Vancouver, while sales were weak in 2018, they have rebounded significantly since early 2019. Re-sales in Calgary are soft, but show some signs of recovery in recent months. The Montréal market remains strong with sales continuing to trend upward.
Chart 1.7b
This chart illustrates the cumulative house price growth since January 2015 in the major markets of Toronto, Vancouver, Calgary and Montréal. While price growth slowed down in 2018 in Toronto and Vancouver, prices are starting to pick up again. In Calgary, prices have declined since 2015, but show signs of stabilization in recent months. In contrast, Montréal home prices have been steadily rising since 2015.
Chart 1.9a
The chart disaggregates total real Canadian exports into three components - energy exports, non-energy goods and services exports - then indexes each component to 2015 to show their performance relative to each other since that time. The chart illustrates that since 2015 exports of non-energy goods have grown slightly but at a much slower pace than energy and services exports.
Chart 1.10a
This chart illustrates how the evolution of Canadian real business investment, for both total business investment and investment excluding oil and gas, compares to the United States, the United Kingdom and Germany. It shows that both Canadian series reached a trough in late 2016, rebounded through early 2018 and have remained broadly unchanged since then. Meanwhile, a range for the three other countries shows that investment rose throughout the whole period in these countries. It also shows that Canadian business investment excluding oil and gas has recouped its pre-shock level.
Chart 1.10b
This chart shows an oil and gas versus non-oil and gas breakdown of real business investment growth. It shows that both categories contributed negatively to growth from early 2015 until early 2017, at which point both sources briefly contributed positively to growth, with non-oil and gas business investment showing very strong growth until mid-2018. Since then, oil and gas investment growth has been negative again, with non-oil and gas investment growth close to zero.
Chart 1.12a
This chart illustrates the budgetary balance over time, both in absolute terms and as a share of GDP. It shows an improving balance over the forecast horizon, with a deficit of $26.6 billion in 2019-20, decreasing to $11.6 billion in 2024-25.
Chart 1.12b
This chart illustrates the federal net debt-to-GDP ratio over time. It shows a peak of over 60% in the late 1990s, dropping to a projected 29.1% in 2024-25.
Chart 1.13b
This chart illustrates the projected budgetary balance under the four most optimistic and the four most pessimistic economic forecasts. It shows a widening range of deficit outcomes.
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