Real GDP rose 3.0% in 2017, following 1.4% growth in 2016. Much of this growth was attributable to the first two quarters of 2017, with deceleration observed toward the end of the year. Final domestic demand advanced 3.0% with steady growth throughout the year. Household final consumption expenditure rose 3.5%, with increased outlays on goods (+3.9%) and services (+3.2%). Increased expenditures on insurance and financial services (+5.0%) and purchases of vehicles (+6.3%) were strong contributors to growth. Business gross fixed capital formation rose 2.6%, following a 4.5% decline in 2016. Investment in machinery and equipment (+6.0%) and residential structures (+3.1%) both increased sharply. Investment in non-residential structures rose 0.3%, following two annual declines. Also contributing to growth was business investment in inventories, up by $13.9 billion, of which $13.6 billion was in non-farm inventories. Manufacturers, wholesalers, and retailers all added to their stocks in each quarter. Exports grew 1.0% for the second consecutive year, with gains in both goods (+0.6%) and services (+2.8%). Imports increased 3.6% after falling 1.0% in 2016. Compensation of employees rose 3.9% (nominal terms), contributing to a 4.8% gain in household disposable income. This was slightly faster than the growth in household final consumption expenditure (+4.6%), and the household saving rate consequently edged up to 3.6%. The gross operating surplus of corporations increased 9.5% as earnings of both non-financial and financial corporations rose sharply. Expressed at an annualized rate, real GDP rose 1.7% in the fourth quarter. In comparison, real GDP in the United States grew 2.5%.

1. GROSS DOMESTIC PRODUCT – CANADA –
DECEMBER 2017
BY: PAUL YOUNG, CPA, CGA
DATE: MARCH 2 2018

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. INTRODUCTION
 GDP is key measurement for a country. Allot is said about GDP, especially by various government. The
reality is government gets to much credit for booming economy and too much fault for recession.
 There are many factors drive GDP including taxation, business returns, consumer spending and
government spending. 2/3 of economies tend to be driven by consumer spending. If you set policies
that takes more money out people’s pocket book then that will lead to less consumer spending.
 Canada no longer has the fastest growing economy in the G-7 -
http://www.gbm.scotiabank.com/English/bns_econ/forecast.pdf

4. AGENDA
 Summary
 What is GDP
 Example of GDP
 GDP by decade
 GDP / Canada Example (GDP % by Government)
 GDP Global Forecast
 December 2017 GDP by Sector
 GDP / Canada (LPC vs CPC)
 Role of Government and GDP
 Middle Class
 2018/2019 Federal Budget
 GDP

5. SUMMARY
 Real GDP rose 3.0% in 2017, following 1.4% growth in 2016. Much of this growth was attributable to the first two quarters of 2017,
with deceleration observed toward the end of the year. Final domestic demand advanced 3.0% with steady growth throughout the
year.
 Household final consumption expenditure rose 3.5%, with increased outlays on goods (+3.9%) and services (+3.2%). Increased
expenditures on insurance and financial services (+5.0%) and purchases of vehicles (+6.3%) were strong contributors to growth.
 Business gross fixed capital formation rose 2.6%, following a 4.5% decline in 2016. Investment in machinery and equipment (+6.0%)
and residential structures (+3.1%) both increased sharply. Investment in non-residential structures rose 0.3%, following two annual
declines.
 Also contributing to growth was business investment in inventories, up by $13.9 billion, of which $13.6 billion was in non-farm
inventories. Manufacturers, wholesalers, and retailers all added to their stocks in each quarter.
 Exports grew 1.0% for the second consecutive year, with gains in both goods (+0.6%) and services (+2.8%). Imports increased 3.6%
after falling 1.0% in 2016.
 Compensation of employees rose 3.9% (nominal terms), contributing to a 4.8% gain in household disposable income. This was slightly
faster than the growth in household final consumption expenditure (+4.6%), and the household saving rate consequently edged up
to 3.6%.
 The gross operating surplus of corporations increased 9.5% as earnings of both non-financial and financial corporations rose sharply.
 Expressed at an annualized rate, real GDP rose 1.7% in the fourth quarter. In comparison, real GDP in the United States grew 2.5%.

6. WHAT IS GDP?
Source - https://www.investopedia.com/ask/answers/199.asp or https://www.thebalance.com/what-is-gdp-definition-of-gross-domestic-product-
3306038
Gross domestic product is the best way to measure a
country's economy. GDP is the total value of everything
produced by all the people and companies in the country. It
doesn't matter if they are citizens or foreign-owned
companies. If they are located within the country's
boundaries, the government counts their production as GDP.

7. GDP BY DECADE
Source - https://www.nextbigfuture.com/2017/12/a-multi-decade-economic-
boom.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2Fadvancednano+%28nextbigfuture%29

8. GDP % AND GROWTH BY SECTOR
Source - http://www.statcan.gc.ca/daily-quotidien/180302/dq180302b-eng.htm

9. 2018 – GDP / G7
Source - https://www.focus-economics.com/regions/major-economies

10. CPC/HARPER VS TRUDEAU/LPC
Source – Government of Canada and Scotiabank

11. BLOG –
EMPLOYMENT –
ENTRY-LEVEL
 Did the Liberals not run on jobs for all? https://www.liberal.ca/realchange/opportunities-for-young-
canadians/
 “After ten years under Stephen Harper, good-quality job opportunities for young Canadians are tougher
find tougher to find. Faced with high unemployment and underemployment, many young people have
stopped looking for work altogether.
 This is hard for both young people and their families. Many parents are seeing their household debt rise and
retirement savings dwindle as they struggle to support their grown children, who often return home. It is
time to invest in young Canadians – to help them get the work experience they will need to start their
careers and contribute fully to our economy.
 Yet in 2016 the job quality index hit the worst level in decades. So, much for sunny ways and jobs, right?
Issues with entry level jobs: -
 https://globalnews.ca/news/3914000/university-graduates-entry-level-jobs-canada/ “In 2016, around one in
two entry-level jobs did not require a minimum level of education (87,500 vacancies). A quarter of those
gigs (48,400 vacancies) required a high school diploma and one in five (18,300 vacancies) required a college
diploma. Only 14,000 entry-level jobs required a university degree. For comparison, over 250,000 Canadians
graduated from university in 2010. - https://globalnews.ca/news/3914000/university-graduates-entry-level-
jobs-canada/?utm_source=%40globalnews&utm_medium=Twitter
 Goods producing sector continue to lag other sectors in terms of job growth -
https://www.slideshare.net/paulyoungcga/wages-and-employment-canada-policy-analysis - Goods
producing sector would lead to engineering, quality control inspectors, supply chain management, inventory
control, etc.
 Retail/wholesale sector lead a good chunk of the growth. Warehousing is going through automation -
https://www.xconomy.com/boston/2017/11/20/locus-robotics-gets-25m-to-help-warehouse-owners-
compete-with-amazon/
 Job Quality Index - http://www.cbc.ca/news/business/wages-cibc-job-quality-1.3872389 “The quality of
employment in Canada is falling, according to a report from CIBC, with more low-paid jobs and those
earning less than the average wage falling further behind. Both young people and Canadians over 55 are
stuck in the low-wage job sector, primarily in-service jobs. But even among workers aged 25 to 54, 53 per
cent had jobs that paid between 50 and 100 per cent of the average wage.
 http://www.huffingtonpost.ca/2017/12/03/stingy-canadian-employers-face-workforce-crisis-in-2018-
report_a_23295535/ “Canada's employers face a potential "workforce crisis" next year, as employees take
advantage of a strong job market to leave their jobs in search of better pay and work conditions, a new
report says. And it's due to employers' own reluctance to improve wages and hire permanent workers,
according to the report from recruitment agency Hays Canada.

12. BLOG #1 – MIDDLE CLASS
 http://www.torontosun.com/2017/10/11/canucks-believe-middle-class-dream-replaced-by-nightmare-poll
 Yet Trudeau said the article is wrong? https://globalnews.ca/news/3769136/taxes-middle-class-liberals/ I hate to tell PM Selfie that Trudeau
is wrong. You cannot eliminate tax credits, income tax splitting, etc. and then expect taxes will go down, because they do not!
https://www.slideshare.net/paulyoungcga/did-the-middle-class-cut-truly-help-canadians . FYI - The child tax benefit did not reduce poverty
by 400,000.
 Trudeau so called middle class tax cut did not work - https://globalnews.ca/news/3769136/taxes-middle-class-liberals/. This is before carbon
tax is implemented across Canada 2019. The carbon tax will hurt low to middle class more than the wealthy.
http://www.cbc.ca/news/canada/saskatoon/australian-carbon-tax-opponent-chris-berg-saskatchewan-1.3884765
 Yet the PBO office said CPC cuts help low to middle class Canadians. Trudeau again got it wrong about Harper and his policies!!!!
https://globalnews.ca/news/1356467/tax-cuts-since-2005-net-canadians-30b-pbo/.
 Wage growth - How about the fact your government has lost 75,000 mfg jobs? http://business.financialpost.com/opinion/75000-
manufacturing-jobs-lost-thats-the-price-of-ontarios-electricity-disaster How come incomes have grown only 3.8% for 10 years?
http://www.cbc.ca/news/politics/statistics-canada-census-2016-income-hightlights-1.4287179
 In 2014 is when Canada had the best middle class in the world - https://beta.theglobeandmail.com/report-on-business/top-business-
stories/canadas-middle-class-now-worlds-richest-study-suggests/article18090490/?ref=http://www.theglobeandmail.com&
 People complain about corporations and yet they contribute to wealth distribution –
 Harper did not just focus on tax cuts including corporate tax, but also set up innovation funds and sign trade deals to expand exports.
https://www.slideshare.net/paulyoungcga/wealth-distribution-canada-corporate-tax-july-2017. Trudeau was elected and said he will focus
on clean technology, right? https://www.liberal.ca/wp-content/uploads/2015/08/A-new-plan-for-Canadas-environment-and-economy.pdf
The problem is clean technology companies are not making money, right? http://www.bnn.ca/awash-in-red-ink-canadian-clean-tech-
struggling-despite-ottawa-s-green-goals-1.729679
 Harper created many innovation funds, sign trade agreements, expanded ports like Montreal, Prince Rupert, etc. Harper was all about
getting goods to market. More could have been done, but pipelines as well as lack of priorities by governments including Ontario on natural
resource development set Harper back - https://www.slideshare.net/paulyoungcga/merchandise-trade-canada-july-2017
 Liberals love to fabricate the facts - https://www.slideshare.net/paulyoungcga/liberal-party-of-canada-election-promises-september-2017.
FYI the middle class tax cut was supposed to be revenue neutral and it was not - http://www.huffingtonpost.ca/2015/12/07/liberals-middle-
class-tax-cut-rich_n_8740118.html

13. TWEET – CANADA COMPETITIVENESS
 http://business.financialpost.com/opinion/jack-mintz-if-trudeau-ever-accepts-reality-heres-how-he-can-save-
canadas-competitiveness

 Trudeau does not get it about competitiveness or his government would not push carbon tax, more regulations,
elimination of tax credits and small business tax proposals
 Carbon Tax - http://business.financialpost.com/commodities/energy/ottawas-carbon-tax-plan-to-shrink-economy-by-3-billion-
hurt-loonie-in-2018-study
 NAFTA - https://www.thestar.com/news/canada/2018/01/25/trudeau-confident-nafta-deal-within-reach-as-canada-tables-new-
proposals.html
 Regulations - http://www.cbc.ca/news/canada/calgary/ceri-eastern-refineries-canadian-oil-1.4502037
 Regulations - http://business.financialpost.com/commodities/this-isnt-an-episode-of-columbo-burnaby-lawyers-grill-kinder-
morgan-at-trans-mountain-route-hearing
Other Sources - https://www.slideshare.net/paulyoungcga/cost-competitiveness-canada-december-2017

14. TWEET – 2018/2019 FEDERAL BUDGET
 “Morneau says Canada needs to play both a long game and a short game—and that the brightening
economy enables the government to do just that.
 We cannot get goods to market - https://www.slideshare.net/paulyoungcga/2015-election-promise-liberal-party-
of-canada-goods-to-market-canada-january-2018
 GDP growth will average 2.1%. I hardly call 2.1% robust growth! https://www.slideshare.net/paulyoungcga/capital-
investment-and-corporate-taxation-canada or https://www.slideshare.net/paulyoungcga/2018-fiscal-
management-plan-canada-february-2018
 Source – https://www.canadianmanufacturing.com/regulation/morneau-defends-budget-says-ottawa-
must-play-short-long-game-208989/ or http://www.gbm.scotiabank.com/English/bns_econ/forecast.pdf

15. TWEET - GDP
 http://www.firstpost.com/india/donald-trump-and-i-are-similar-our-policies-worked-well-for-our-economies-says-justin-
trudeau-at-iim-ahmedabad-4358191.html

 Trump reduced taxes and regulations - http://thehill.com/homenews/administration/370431-trump-reduced-regulations-tax-
cuts-making-us-a-powerhouse-again
 Trudeau forced carbon tax, payroll hikes and added more regulations -
http://business.financialpost.com/commodities/energy/suncor-not-embarking-on-major-new-projects-unless-canada-up-its-
game
 Canada GDP will trail USA for several reasons and that includes Trump focus the economy. Trudeau is focus on photo ops -
https://www.slideshare.net/paulyoungcga/gdp-canada-real-truth-february-2018
 Trudeau truly lives in fantasy world!
 @JustinTrudeau @Bill_Morneau
 How is the sign all is good?
 Trump reduced taxes and regulations http://thehill.com/homenews/administration/370431-trump-reduced-regulations-tax-cuts-
making-us-a-powerhouse-again

16. MIDDLE CLASS