September 2016 - Gross Domestic Product (GDP) – Canada By:Paul Young, CPA, CGADate: November 30, 2016

Agenda • Summary • Foreign Aid / Economy • GDP by Industry Segment• Graduates and Job Market

Summary – September 2016 – GDP – Canada

• Canadian real GDP rose at a 3.5% annual rate in Q3, basically on consensus and a nice rebound from the wildfire-induced 1.3% drop in Q2 (revised slightly stronger from the initial reading of -1.6%; Q1 was also revised up by 2 ticks to +2.7%). The comeback was led by an 8.9% snapback in exports (largely reflecting a return to normal oil production levels, and not a burst in other sales), with some notable support from capex, inventories and consumer spending. The latter rose at a 2.6% annual rate, the best quarter in a year. Notably, we continue to wait for serious signs of the much-vaunted federal stimulus package, as government consumption fell at a 1.2% a.r. and public investment was only moderate at +2.6%. Housing also dragged on growth, dropping at a meaty 5.5% clip. One real ray of sunshine was the fact that business spending on M&E and structures rose 3.5%, its first gain in two years. Source – BMO

• When it comes to economies, what goes down usually comes back up, and Canada is no exception. The resumption of activity following the May wildfires in Alberta delivered the fastest pace of economic growth since the end of 2014. Canada has regained back the ground lost in the second quarter, and then some. Beneath the surface however, lies an economy that continues to struggle to find new sources of growth. The bulk of the gain both in the quarterly and monthly figures can be attributed to one-offs. Absent the post-wildfire resumption of energy production, the quarter would have likely been much weaker. Indeed, business investment, which had been expected to 'bottom out', instead continued its decline, which would have been worse absent a one-off module delivery for the Hebron offshore project. Indeed, the 0.3% monthly number notwithstanding, momentum heading into the end of the year appears soft as GDP excluding energy gained just 0.1% in September. Only a marginal improvement in the rate of growth is expected in 2017. Source – TD Economics

Foreign Aid / Canada / GDP • The Government has already made several decisions resulting in more than

$5 billion on a cash basis being invested in activities that will allow Canada to make a real and valuable contribution to a more peaceful and prosperous world, including:• $2.65 billion by 2020 on a cash basis, to address climate change in developing

countries;• More than $1.6 billion over three years, starting in 2016–17, towards security,

stabilization, humanitarian and development assistance for Iraq, Syria, Jordan and Lebanon;

• $678 million over six years, starting in 2015–16, to respond to the Syrian refugee crisis and aid in the resettlement of 25,000 Syrian refugees; and

• $100 million in 2015–16 to the United Nations High Commissioner for Refugees, to help support critical relief activities in the region.

• Source - http://www.huffingtonpost.ca/brett-tarver-/foreign-aid-spending_b_12961312.html or http://www.budget.gc.ca/2016/docs/plan/ch6-en.html

Comments:• Many refugees have

been forced on to welfare roles and food banks• This impacts

provincial and municipal budgets

• Lower spending on other programs like infrastructure

• Foreign Aid• Does not help the

domestic economy• Foreign Aid is

important to countries• There are issues

with delivering of Foreign Aid

GDP by Industry Segment

Source – Stats Canada Source – BMO

GDP / Expenditure

Facts:• Infrastructure spending has not flow to projects across Canada• Consumer spending continues to grow but will face pressures due to carbon taxation (Ontario

and Alberta)• Business Investment seen a spike due to oil equipment purchase. Business are to hesitant to

invest due both slow growth globally as well as government policies (Hydro Rates and Red Tape)