Fall Economic Statement 2018: Text Version

Introduction

Figure 1

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Chapter 1

Chart 1.3a

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Chart 1.3b

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Chart 1.4a

This chart shows the joint evolution of consumer confidence and growth in average weekly earnings from January 2015 to October 2018 for Canada. Consumer confidence is shown as an index, where the year 2014 equals 100. Average weekly earnings is expressed as year-over-year growth. Both series are highly correlated, decreasing in 2015 and up to mid-2016 for average weekly earnings, then increasing in 2017. Growth in average weekly earnings has plateaued since the beginning of 2018 and consumer confidence has somewhat declined over the latest months.

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Chart 1.4b

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Chart 1.5b

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Chart 1.8a

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Chart 1.8b

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Chart 1.10a

The bar chart shows the appreciation from the beginning of 2018 to November 15 of the U.S. dollar versus seven emerging market economy (EMEs) currencies: Argentina, Turkey, Brazil, Russia, South Africa, India and Indonesia.

The U.S. dollar has appreciated the most against Argentina (over 90 per cent) and Turkey (over 40 per cent), followed by (in order) Brazil, Russia, South Africa, India and Indonesia (in a range of just under 10 per cent to just above 15 per cent).

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Chart 1.10b

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Chart 1.11b

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Chart 1.12

The chart shows the evolution of the price differential between West Texas Intermediate (WTI) crude oil and the Canadian Effective Price (CEP) from January 2012 to early November 2018. This differential is generally volatile over the 2012 through 2015 period, before broadly stabilising near US$10 per barrel between late 2015 and late 2017. Since late 2017, the differential has risen sharply to the US$40-range. The chart also shows the volume of crude oil exported by rail on a separate axis. This line shows that exports of oil by rail have trended up steadily since early 2016 and currently sit at a record high over 200,000 barrels per day.

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Chapter 2

Chart 2.1

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National Housing Strategy Targets

100,000+ new housing units created

385,000 community housing units protected + 50,000 created

530,000 households removed from housing need

300,000 households supported with a Canada Housing Benefit

50 % decrease in chronic homelessness

300,000 existing housing units repaired and renewed

7,000 shelter spaces created or repaired for survivors of family violence

Return to report - National Housing Strategy Targets

Chart 2.2

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Chapter 3

Investing in Canadians

Middle class tax cut
Canada Child Benefit
Enhanced Canada Pension Plan
Guaranteed Income Supplement
Canada Workers Benefit
More flexible and inclusive Employment Insurance benefits

Investing to create long-term growth

Strategic Infrastructure

Investing in:

• Public transit
• Green and social infrastructure
• Infrastructure that supports trade
• Rural and northern communities
• Rural broadband

Skills and Training

Investing in:

• Modernized Labour Market Transfer Agreements with provinces and territories
• Adult upskilling through the new Skills Boost initiative
• Future Skills to identify emerging training needs, and test innovative approaches to skills development
• Expansion of Youth Employment Strategy and work-integrated learning to help youth gain valuable work experience and skills
• Expanded student financial assistance for post-secondary students from low- and middle-income families
• Canada's immigration system to ensure it supports both Canadian employers and the labour market

Innovation and Science

Investing in:

• Granting councils
• Innovation Superclusters Initiative
• Growth capital (Business Development Bank of Canada, Export Development Canada, Venture Capital Catalyst Initiative, Strategic Innovation Fund, Regional Development Agencies)
• Innovative Solutions Canada
• Intellectual Property Strategy
• National Research Council – Industrial Research Assistance Program
• Women Entrepreneurship Strategy Trade and Foreign Investment Competitiveness

Trade and Foreign Investment

Investing in:

• New and modernized free-trade agreements (Comprehensive Economic and Trade Agreement (CETA), Comprehensive and Progressive Agreement for Trans-Paci­c Partnership (CPTPP), and the United-States- Mexico-Canada Agreement (USMCA))
• Support for companies exploring new markets
• Enhanced trade services for exporters
• Foreign investment attraction
• Internal trade

Competitiveness

Investing in:

• Small business tax reduction
• A simpler, clearer, and more modern regulatory system
• Proposed tax incentives to enhance business confidence in Canada Trade and Foreign Investment

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Chart 3.1a

This chart shows the evolution of the total government deficit in the U.S. and Canada, as a share of GDP, between 2010 and 2023. The data are provided by the International Monetary Fund in the World Economic Outlook, using actual data from 2010 to 2017, and projections from 2017 to 2023. The chart shows that compared to Canada, the U.S. has consistently had much higher total government deficits as a share of GDP since 2010. In 2010, the total government deficit as a share of GDP was 10.6 per cent in the U.S. compared to 4.7 per cent in Canada and in 2017, it was 3.8 per cent in the U.S. compared to 1.1 per cent in Canada. This is projected to continue until the end of the forecasted period, where the total government deficit as a share of GDP in 2023 is projected to be 4.5 per cent in the U.S. compared to 0.9 per cent in Canada.

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Chart 3.1b

This chart shows the evolution of the total government net debt in the U.S. and Canada, as a share of GDP, between 2010 and 2023. The data are provided by the International Monetary Fund in the World Economic Outlook, using actual data from 2010 to 2017, and projections from 2017 to 2023. The chart shows that compared to Canada, the U.S. has consistently had much higher total government net debt as a share of GDP since 2010. In 2010, total government net debt as a share of GDP was 70.0 per cent in the U.S. compared to 26.8 per cent in Canada in 2010 and in 2017, it was 78.8 per cent in the U.S. compared to 27.7 per cent in Canada in 2017. This is projected to continue until the end of the forecasted period, where the total government net debt as a share of GDP in 2023 is projected to be 83.7 per cent in the U.S. compared to 25.3 per cent in Canada.

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Chart 3.2

This chart shows the evolution of after-tax corporate profit margins between 1997 and 2018. The data are derived from the Quarterly Survey of Financial Statements available on Statistics Canada. The chart shows that after-tax corporate profit margins rose from 4.2 per cent in 1997 to a high of 8.1 per cent in 2017.

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Chart 3.3a

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Chart 3.3b

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Chart 3.4a

This chart shows the evolution of global exports of goods (in trillions of U.S. dollars) and Canada's share of those exports (percent). The data are derived from the United Nations COMTRADE database and is measured on a customs basis. The chart shows that between 2000 and 2016, global exports rose from just over $US 5 trillion to over $US 15 trillion, but Canada's share of those exports declined from almost 5% to just over 2%.

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Chart 3.4b

This chart provides a breakdown of the destination of Canadian goods exports by region in 2017. The data is derived from the United Nations COMTRADE database and is measured on a customs basis. Definitions of advanced and emerging economies were sourced from the International Monetary Fund. The chart shows that 76% of Canada's goods exports in 2017 were destined for the U.S. Exports to emerging markets represented 12%. The European Union was the destination for 7% of Canada's goods exports, while the remaining 5% was destined for other advanced economies.

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Canada's free trade network

FTA concluded or in force

% of World GDP

62.5%

Population (Millions)

1,479

FTA in negotiations commenced

% of World GDP

6.7%

Population (Millions)

1,660

Exploratory discussions

% of World GDP

18.4%

Population (Millions)

1,969

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Figure 3.1

Left:
Strengthening Trade Corridors to Asia and Europe
More Help for Companies Exploring New Markets
More Trade Services for Exporters

Right:
Increasing Canada's overseas exports by 50% by 2025

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Figure 3.2

What we want to do

• Approve new products and services for Canadians faster
• Simplify regulations to make it easier to do business
• Reduce costs for business through harmonized regulations
• Support innovation through greater collaboration between regulators and business

How we will do this

Explore making competitiveness a permanent part of regulatory mandates
Introduce an annual modernization bill to keep regulations up-to-date
Establish a dedicated External Advisory Committee on Regulatory Competitiveness
Launch a Centre for Regulatory Innovation
Enhance Government's capacity to develop and implement effective regulations
Take immediate action in response to business recommendations

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Annex 2

Figure A2.1a

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Figure A2.1b

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