Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 HIGHLIGHTS CANADIAN ECONOMIC GROWTH PROSPECTS• Real GDP growth should pick up from the anemic Q3 pace of 1% FOR 2011 RECEIVE A MODERATE BOOST and average 2.6% in 2011 – more than a half percentage point The Canadian economic growth profile has been unfolding largely as we higher than the previous fore- had anticipated in our prior Quarterly Economic Forecast (QEF), released in cast in September. For 2012, our mid-September. We had argued that the engines of growth would rev down as projection has been dowgraded the recovery matured and as a number of headwinds – a waning in the impact slightly to 2.5%, from 2.8%. from fiscal stimulus, a sluggish U.S. recovery, an elevated Canadian dollar, and• The upward revision in 2011 re- a downswing in residential investment chief among them – would increasingly flects an improved U.S. outlook. enter the picture. The release of the third quarter National Accounts data on In addition, the policy interest November 30, which revealed a tepid 1% (Q/Q annualized) rate of growth for rate in Canada is expected to stay real GDP, added credence to this view. low for longer. This general story remains intact, but recent developments warrant some• Despite these revisions, the tweaking to our forecast profile. The most significant developments since Sep- general story remains the same. tember have been an announcement in October that the U.S. Federal Reserve will After having rebounded strongly, purchase an additional $600 billion in U.S. Treasuries – so called QE2, and more the recovery in Canada has tran- sitioned down to a more moder- recently the strong likelihood that the CANADIAN REAL GDP ate but sustainable pace. Modest (Annualized q/q % change) income gains, high indebted- the Bush tax cuts 8 ness, flat housing markets, and will be extended Fcst as of December 6 Forecast waning fiscal stimulus are ex- to 2011 alongside Fcst as of September pected to keep economic growth other forms of tax 4 moderate. relief. These mea- 2• Regionally, a rotation in growth sures are expected 0 leaders from Central provinces, to impact near-term parts of the Atlantic, and British economic growth -2 Forecast Y/Y % Chg. (Q4/Q4 % growth) Columbia towards the Prairies through two chan- -4 2010F 2.9% (2.8) and Newfoundland & Labrador is 2011F 2.6% (2.9) nels. First, it in- -6 materializing as expected, helped 2012F 2.5% (2.2) by the recent strength in world creased the likeli- -8 commodity markets. hood that the Bank Q1.08 Q1.09 Q1.10 Q1.11 Q1.12 of Canada will keep F: Forecast by TD Economics as at December 2010 Source: Statistics Canada/Haver Analytics the overnight rate on hold for a longer period of time. And second, near-term U.S. economic growth prospects are moderately brighter than we had envisaged a few months ago. All said, U.S. Derek Burleton, Vice President & real GDP is now forecast to expand by 3.1% next year. Accordingly, we have Deputy Chief Economist (Canada) raised our 2011 Canadian real GDP growth forecast to 2.6% compared to 2.0% in mailto:firstname.lastname@example.org our last projection, with the soft Q3 result ultimately representing the low-water mark for quarterly advances. We revised down our 2012 growth forecast, but Pascal Gauthier, Senior Economist (Canada) only slightly – to 2.5% from 2.8%. While not robust, this solid pace is consis- mailto:email@example.com tent with a decline in the jobless rate, which is expected to fall toward 7% by the end of 2012. Diana Petramala, Underlying the moderately brighter national forecast, the story at the regional Economist (Canada) level continues to be one of rotation across provincial economies in terms of mailto:firstname.lastname@example.org growth leadership. In recent months, our expectation has been that the economic growth momentum would shift from regions that led the way out of recession
Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 2 accelerate to 2.5-3.0% in the coming quarters. CONTRIBUTION TO REAL GDP GROWTH (% annualized) 8 Near-term consumer spending growth to be bolstered 6 by low interest rates 4 In the near-term, the largest boon to Canadian economic 2 growth from QE2 will be a more sustained low policy inter- 0 est rate environment. Canadian borrowing rates are expected -2 -4 to remain lower for longer than had been anticipated a -6 few months ago. Not only have some of the benefits from -8 purchases of U.S. Treasuries by the Fed spilled across the -10 Net trade Consumer Spending border, but expectations that the Bank of Canada (BOC) will -12 Business Investment Real GDP Growth Government leave its overnight rate at a stimulative 1.00% until midway 2006 2007 2008 2009 2010 through 2011 have mounted. TD Economics has revised up its forecast for consumerSource: Statistics Canada/Haver Analytics spending growth by 0.5 percentage points in 2011 as inter-– notably central Canada, British Columbia and parts of est rates are expected to remain stimulative through theeastern Canada – toward the Prairies and N&L. Develop- first half of the year. Canadian households have respondedments since mid-year have corroborated this change in tide, quite favourably to record low interest rates. In particular,and especially a significant rise in the prices of crude oil, interest rate sensitive areas, such as consumer spending onmetals and a number of other commodities. Over the 2011- durables, and the resale housing market, have been sources12 period, we expect N&L and Alberta to lead the way with of upside surprises for the Canadian economy. There areaverage real GDP growth of 3.5% per year, followed by reasons to believe that consumers will continue to be enticedSaskatchewan and Manitoba with 3.4% and 3.0% turnouts. by low interest rates, at least in the near-term. Still, theBy 2012 those regions are likely to experience declines in pace of consumer spending is expected to moderate fromtheir jobless rates of a percentage point or more from levels the lustrous pace of 3.5% over the past year of economicprevailing in 2010. Elsewhere, average annual rates of recovery, to a more moderate sub-3% pace through the firsteconomic expansion are likely to run in the 2.0-2.5% range half of 2011.in 2011-12, and recorded declines in jobless rates will likelybe more modest. Consumers can’t afford to go out on another binge While we are a bit more upbeat about the ability ofCanada’s real GDP growth rate falls to a low in Q3 After the second quarter had marked a significant CONSUMER RESPONSE TO LOW INTERESTdownshift in real GDP growth from 5.6% to 2.3%, the third RATESquarter recorded a further deceleration to 1.0% (annual- Consumer Spending (annualized % change)ized). The weaker performance came mostly as a result of 6 3-mth T-bill Yield (%)a substantial decline in exports and a solid gain in imports, forecastwhich combined to subtract 3.5 percentage points off the 4headline advance. The arithmetic of net trade on growth 2overstated the weakness, however, as the import gain partlycame from a further rapid increase of close to 4% in real 0domestic demand. Consumers ramped up their spending ata healthy 3.5% clip, while business spending on machinery -2and equipment – which is heavily import-intensive – ex-ploded by around 30% (annualized) for the second straight -4 2008 2009 2010 2011 2012quarter. With such a massive drag from net trade unlikely F: Forecast by TD Economics as at December 2010to be repeated, Q3 is likely to mark the low point in the Source: Statistics Canada/Haver Analyticseconomy’s recovery, with real economic growth poised to
Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 3 forever. And, as uncertainties over the global economic PERSONAL SAVINGS RATE outlook abate, the Bank of Canada is expected to resume (%) with interest rate hikes. We believe the first rate hike will 12 come in July of 2011, after which we expect the Bank of 10 Canada to hike the overnight rate by 25 basis points at each fcst U.S. meeting through the second half of the year bringing the 8 Canada overnight rate to 2.00% by year end. The overnight rate 6 is then expected to climb by another percentage point to reach 3.00% by the end of 2012. As a consequence of high 4 indebtedness, households have become more sensitive to 2 rising interest rates. And, unless the pace of borrowing cools significantly over the next few quarters – a scenario we deem 0 unlikely – the cost of servicing monthly debt payments will 1995 1997 1999 2001 2003 2005 2007 2009 2011 rise to levels not seen since the mid-1990’s when interestF: Forecast by TD Economics as at December 2010 rates were at double digits. Beyond 2011, a more sustain-Source: Statistics Canada, U.S. Federal Bureau of Statistics, Haver Analytics able pace of household borrowing is consistent with realhousehold spending to remain firm in the near-term, our spending growth in a moderate range of 2.0-2.5%. And, asstory that an over-indebted household will be an impediment interest rates rise, the mix of spending will likely shift fromto economic growth has not changed. While debt-loads are interest-rate sensitive goods to non-durables and services.still manageable for the majority of Canadian households The resale housing market has been one area of thedue to low interest rates, the degree of wiggle room has Canadian economy that has benefited from a sustained lowshrunk and an increasing share of households are facing interest rate environment. After slumping through the firsta position of financial stress. This means that for many six months of 2010, the resale housing market appears tohouseholds, capacity to spend will be constrained by the rate have stabilized since July, with home sales proving to beof increase in their personal disposable income (PDI). On more resilient than we originally anticipated – arguing forthat front, consumers will likely face an income constraint. a softer landing in the housing market than TD EconomicsUnfortunately, PDI gains are expected to run at a lukewarm envisioned in September’s QEF. With the market likely toannual rate below 4% over the next 3-4 quarters in view of remain relatively well-balanced, price changes are likely tocontinued sluggish job gains of 5,000-15,000 per month and be modest over the next two years, posing less of a downsidemuted wage increases of 2% or less across most sectors. risk to our Canadian economic outlook. Despite the upward In view of our forecast for consumer spending and per- revision to existing home sales and home price growth, wesonal disposable income growth, the personal savings rate are still of the view that residential construction will be ais expected to edge down from an already ultra-low rate soft spot for the Canadian economy. The combination ofof 3.3% in Q3 to 2.9% by the first quarter of 2011. Thiscompares to a 6% personal savings rate in the U.S., and HOUSING ACTIVITY TO SOFTENis at the low end of the G-7 nations. It is our view that a y/y% change Contribution to real GDP growth (%)more sustainable personal savings rate is something north 20 2.0of 4%, but in the current low interest rate environment, the 15 forecast 1.5savings rate is likely to experience little upward pressure 10 1.0from its current level. There is a risk that households opt 5 0.5to lift their pace of saving earlier, particularly in the wake 0 0.0of high household indebtedness. Under this scenario, the -5 -0.5rate of consumer spending in the 2011-12 period would be -10 -1.0diminished vis-à-vis our base case forecast. -15 Durable Spending (rhs) -1.5 Beyond the first half of 2011, forecast PDI growth should -20 Residential Investment (rhs) -2.0 Existing Home Prices (lhs)improve, but the corresponding benefit to household finances -25 -2.5– and hence consumer spending – will be negated by the 2007 2009 2011 2013hit to budgets from higher interest rates. As the Bank of F: Forecast by TD Economics as at December 2010Canada has warned, interest rates cannot remain this low Source: Statistics Canada/ Haver Analytics
Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 4 to rapidly expanding developing markets and higher prices HIGH LOONIE ERODES CANADAS TRADE COMPETITIVENESS for their goods. As measured by the 18-item TD Commodity Price Index (in Canadian-dollar terms), prices are projected U.S. $/Cad $ Exchange Rate Canadian Share of U.S. Imports to remain on an upward track in 2011-12, with healthy gains 1.8 22 of 9-12% per year. That being said, this upward path could 1.6 C$ appreciation 20 prove to be anything but smooth in light of ongoing finan- cial worries in Europe that could persist and trigger bouts 1.4 18 of flight away from commodities and other perceived risky 1.2 16 assets in the coming months. As an added plus to Canadian export growth in the first 1.0 14 half of 2011, the Canadian dollar is expected to trend down 0.8 12 to 92 U.S. cents by mid-2011 from its current 97-99 U.S. trading range, as fears over European Sovereign debt lead 0.6 10 1995 1997 1999 2001 2003 2005 2007 2009 to a general rise in the U.S. trade weighted dollar. This Source: Statistics Canada/Haver Analytics should help Canadian exporters regain some lost ground due to a loss in competitiveness experienced over the lastsoft housing demand and an over-supply in the new hous- year as the loonie traded uncomfortably near parity. But, asing market is expected to dampen residential construction the Bank of Canada resumes along a hiking path at a timeover 2011, as the industry winds down from a period of when the U.S. is expected to maintain interest rates at theirvery strong growth. exceptionally low levels, the loonie is expected to settle into a higher range of 95-96 U.S. cents in late 2011 and 2012.Benefits of stronger U.S. demand mitigated by high loonie Businesses to help fill the void of reduced govern- Another factor that will lend greater support to real GDP ment stimulusgrowth than we envisaged a few months ago is on the export Elsewhere, our expectations have remained virtuallyfront. More specifically, we have lifted our 2011 growth unaltered from the September QEF. We continue to buildtarget for the U.S. from 1.9% to 3.1% in 2011, while 2012 in a gradual shift by governments to fiscal restraint. At thewas left unaltered at 2.9%. The additional monetary stimu- margin, the recent announcement by the Government oflus, the extension of the Bush tax cut and other tax relief Canada to extend stimulus funding for projects to the thirdare expected to bolster growth in both business investment quarter of next year should smooth out an otherwise sharperin machinery and equipment and consumer spending on drag that had been foreseen from the unwinding the fiscaldurables in the U.S. by eight and three percentage points, stimulus. In contrast to the government sector, businessrespectively, in 2011. Since these items make up a sig- investment remains a bright spot in the Canadian outlook.nificant share of Canadian exports to the U.S., the brighterprospects south of the border certainly bode well for the CONTRIBUTION TO REAL GDP GROWTHCanadian export sector. Exports are now anticipated to (% annualized)grow at a clip twice the pace anticipated in September’s 5forecast. Part of the increase in exports is expected to be 4 forecastoffset by higher imports, which reflects considerable two- 3way trade between Canada and the United States, and the 2fact that Canadian manufacturers import a significant share 1of inputs to production. Nonetheless, net trade is expected 0to positively contribute to economic growth for the first time -1in over eight years. As a result, Canada’s international cur- -2 Business Investment in M&Erent account deficit is projected to narrow to a manageable -3 Government Spending1.4% of GDP by the end of the forecast period. -4 Within the export sector, prospects for resource indus- 2005 2006 2007 2008 2009 2010 2011 2012tries are among the brightest, as producers enjoy the triple F: Forecast by TD Economics as at December 2010benefit of a strengthening in U.S. demand, strong leverage Source: Statistics Canada/ Haver Analytics
Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 5Respectable gains in corporate profits, the improvementin the investment tax climate in Canada over the past few 2010-2011 ESTIMATE OF GOVERNMENT BUDGET AS A % OF GDPyears and growing pressure on companies to increase labourproductivity are expected to drive continued double-digit 4 Governments in Governments indigit growth rate in machinery and equipment outlays in deficit position surplus/balanced2011 and a high-single digit advance in 2012. 3 positionPrairies and N&L rise to the top 2 As is typically the case, the national showing is likelyto hide significant variations in performances from coast 1to coast. Indeed, since mid-2010, the growth pendulumhas swung away from Central Canada, British Columbia 0and parts of the Atlantic towards the Prairies and N&L. PEI NS NB QC ON MB BC Nfld SK ABLooking ahead to the 2011-12 period, there appears to belittle stopping these growth leaders from maintaining an Source: Governments estimates and forecastsabove-average turnout of at least 3%, compared to 2.0-2.5%elsewhere. at the top of the growth charts and unemployment rates on a downward track. In these resource-based economies, a good part of therecent upswing reflects two major factors. First, these In other parts of the country, economies have been show-economies were generally late to participate in the recovery, ing tell-tale signs of fatigue since the third quarter of 2010,partly reflecting the relatively long time lag for improved as the “easy” returns to growth in areas hit hard during thecommodity price conditions to feed through to improved recession – such as manufacturing and housing – diminish,resource investment and output. Add to this fact the signifi- while the economic impact of government stimulus pro-cant rally in prices for crude oil, base and precious metals grams wanes. Case in point is Central Canada’s key factoryand agricultural products over the in the second half of 2010 sector. Although we expect output to ramp up by a healthyand it is not surprising that momentum in these provinces 4% per year in 2011-12, this projected pace is still about halfhas picked up smartly as the year draws to a close. Looking of the estimated advance of 7% in 2010. For automotive as-ahead, further gains in commodity prices and the likelihood sembly and parts, the deceleration is more dramatic – at 29%of a snap back in Prairie farm yields next year from this and 4%, respectively. In British Columbia, the economicyear’s flood-ravaged crop are likely to keep these economies hangover from the hosting of the 2010 Winter Olympics is poised to weigh on its advance in 2011. COMMODITY REGIONS TO BENEFIT FROM The challenge for most of the provinces at the lower-end STRONG COMMODITY PRICES of the growth totem pole is that there are other headwinds Real GDP, (y/y% change) TDCI, (y/y% change) on the horizon. In particular, government deficits and debt 25 50 are poised to become an increasing impediment to expansion fcst 20 40 over the medium term. Ontario, New Brunswick and Nova 15 30 Scotia are facing particularly difficult challenges reining 10 20 in their deficits. Some provinces have already announced 5 10 plans to address their shortfalls through tax increases (i.e., 0 0 Québec and Nova Scotia), which will put a damper on -5 -10 consumer spending growth in the near term. -10 Praries and Newfoundland -20 Notwithstanding the divide between the regions, recov- -15 Rest of Canada -30 eries across the country appear to be self-sustaining. As TD Commodity Price Index -20 -40 governments take their hands off the fiscal accelerator, the 1998 2000 2002 2004 2006 2008 2010 2012 private sector will continue to expand on the back of mod- F: Forecast by TD Economics as at December 2010 Source: Statistics Canada/ Haver Analytics erately growing demand for provincial manufacturing and resource exports and the continued low interest rate environ-
Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 6ment. Admittedly, the scope for declines in jobless ratesin more than half of Canada’s provinces appears limited in2011-12, but nor are jobless rates likely to rise.Bottom line All told, the outlook for 2011 nationally has brightened,with momentum in exports and investment expected to con-tinue into 2012. Nonetheless, key longer-term challengessuch as a renormalization in the level of interest rates, highconsumer debt loads and weak overall productivity are likelyto exert an increasing drag on the rate of economic growthin the latter part of the two-year forecast period.
Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 10 HOUSING STARTS HOUSING STARTS Thousands of units Per cent change 2008 2009 2010F 2011F 2012F 2008 2009 2010F 2011F 2012FCANADA 211.6 148.9 190.8 160.0 169.5 CANADA -7.5 -29.6 28.2 -16.1 5.9 N. & L. 3.2 3.2 4.5 3.8 3.5 N. & L. 20.2 0.8 40.6 -15.6 -7.9 P.E.I. 0.7 0.9 0.7 0.6 0.7 P.E.I. -5.7 24.1 -13.8 -13.5 6.3 N.S. 4.1 3.4 4.5 3.9 4.1 N.S. -13.6 -16.0 32.0 -13.5 5.1 N.B. 4.4 3.5 4.7 3.7 3.9 N.B. -0.4 -21.0 33.5 -20.4 5.4 Québec 48.0 44.0 51.0 42.0 39.0 Québec -2.0 -8.3 16.0 -17.6 -7.1 Ontario 75.5 50.1 59.4 47.0 54.5 Ontario 11.4 -33.6 18.6 -20.9 16.0 Manitoba 5.5 4.1 6.0 6.2 5.9 Manitoba -3.9 -26.3 48.1 3.3 -4.8 Sask. 6.9 3.8 5.5 5.1 4.9 Sask. 16.6 -44.9 45.7 -7.3 -3.9 Alberta 29.2 20.0 27.5 23.2 25.0 Alberta -39.6 -31.6 37.5 -15.6 7.8 B.C. 34.2 16.0 27.0 24.5 28.0 B.C. -13.4 -53.2 68.7 -9.3 14.3F: Forecast by TD Economics as at December 2010 F: Forecast by TD Economics as at December 2010Source: CMHC / Haver Analytics Source: CMHC / Haver Analytics EXISTING HOME SALES EXISTING HOME SALES Thousands of units Per cent change 2008 2009 2010F 2011F 2012F 2008 2009 2010F 2011F 2012FCANADA 431.8 465.1 454.6 420.0 400.0 CANADA -17.1 7.7 -2.3 -7.6 -4.8 N. & L. 4.7 4.4 4.5 3.9 3.7 N. & L. 5.0 -5.9 0.8 -12.4 -5.1 P.E.I. 1.4 1.4 1.5 1.3 1.3 P.E.I. -20.1 -0.6 5.4 -14.2 2.4 N.S. 10.9 10.0 9.9 9.5 9.3 N.S. -8.3 -7.8 -1.0 -4.2 -2.1 N.B. 7.6 7.0 6.8 6.2 6.0 N.B. -7.4 -7.3 -3.6 -8.1 -3.2 Québec 76.8 79.1 81.0 72.4 66.6 Québec -4.8 3.1 2.4 -10.7 -8.0 Ontario 181.0 195.8 199.0 185.0 175.5 Ontario -15.2 8.2 1.6 -7.0 -5.1 Manitoba 13.5 13.1 13.2 12.5 12.1 Manitoba -2.9 -3.2 0.9 -5.3 -3.2 Sask. 10.5 11.1 10.8 10.3 10.0 Sask. -16.0 5.3 -2.7 -4.6 -2.9 Alberta 56.0 57.5 50.0 48.0 45.1 Alberta -21.0 2.7 -13.1 -4.0 -6.0 B.C. 68.9 85.0 78.0 71.0 70.0 B.C. -33.0 23.4 -8.3 -9.0 -1.4F: Forecast by TD Economics as at December 2010 F: Forecast by TD Economics as at December 2010Source: CREA Source: CREA AVERAGE EXISTING HOME PRICE AVERAGE EXISTING HOME PRICE Thousands of C$ Per cent change 2008 2009 2010F 2011F 2012F 2008 2009 2010F 2011F 2012FCANADA 301.8 316.8 338.4 335.9 331.3 CANADA -1.6 5.0 6.8 -0.8 -1.4 N. & L. 176.1 204.6 234.0 230.0 229.0 N. & L. 19.4 16.2 14.3 -1.7 -0.4 P.E.I. 138.9 145.7 145.0 143.0 142.0 P.E.I. 5.1 4.9 -0.5 -1.4 -0.7 N.S. 188.3 195.1 205.0 202.0 200.0 N.S. 4.9 3.6 5.0 -1.5 -1.0 N.B. 144.8 153.4 157.0 155.0 153.0 N.B. 6.3 5.9 2.3 -1.3 -1.3 Québec 220.4 230.1 247.0 244.0 240.0 Québec 5.0 4.4 7.3 -1.2 -1.6 Ontario 299.6 314.8 342.0 337.0 333.0 Ontario -0.1 5.1 8.7 -1.5 -1.2 Manitoba 187.1 199.7 220.0 222.0 225.0 Manitoba 11.8 6.8 10.1 0.9 1.4 Sask. 222.7 232.4 243.0 245.0 247.0 Sask. 28.1 4.3 4.6 0.8 0.8 Alberta 351.4 340.5 355.0 357.0 360.0 Alberta -1.5 -3.1 4.3 0.6 0.8 B.C. 446.4 460.1 497.0 490.0 485.0 B.C. 1.9 3.1 8.0 -1.4 -1.0F: Forecast by TD Economics as at December 2010 F: Forecast by TD Economics as at December 2010Source: CREA Source: CREA
Quarterly Economic Forecast TD Economics www.td.com/economics December 15, 2010 11 Craig Alexander Senior Vice President and Chief Economist mailto:email@example.comCANADIAN ECONOMIC ANALYSIS U.S. & INTERNATIONAL ECONOMIC ANALYSISDerek Burleton, Vice President and Beata Caranci, Associate Vice President and Deputy Chief Economist Deputy Chief Economist mailto:firstname.lastname@example.org mailto:email@example.comPascal Gauthier James Marple Senior Economist Senior Economist mailto:firstname.lastname@example.org mailto:email@example.comDiana Petramala Martin Schwerdtfeger Economist, Macro Economist, International mailto:firstname.lastname@example.org mailto: email@example.comFrancis Fong Christos Shiamptanis Economist, Special Studies Economist mailto:firstname.lastname@example.org mailto: email@example.comDina Cover Alistair Bentley Economist, Industry Economist mailto:firstname.lastname@example.org mailto: email@example.comShahrzad Mobasher Fard Economist mailto:firstname.lastname@example.org TO REACH USSonya Gulati Mailing Address Economist 55 King Street West mailto:email@example.com 21st Floor, TD Tower Toronto, Ontario M5K 1A2 Fax: (416) 944-5536 mailto:firstname.lastname@example.orgThis report is provided by TD Economics for customers of TD Bank Group. It is for information purposes only and may not be appropriatefor other purposes. The report does not provide material information about the business and affairs of TD Bank Group and the members ofTD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this reporthas been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains economicanalysis and views, including about future economic and financial markets performance. These are based on certain assumptions and otherfactors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bankand its affiliates and related entities that comprise TD Bank Group are not liable for any errors or omissions in the information, analysis orviews contained in this report, or for any loss or damage suffered.