Federal government keynesian economics has done little to support economic growth in Canada. The $25-30B deficit have just added to debt, but brought little in terms of economic growth.

1. QUARTERLY PERFORMANCE
– LIBERAL PARTY OF
CANADA
PAUL YOUNG CPA, CGA
APRIL 15, 2017

2. AGENDA
• GDP Growth
• Retail Sales
• Trade Imbalance
• Manufacturing Sales
• Housing Prices
• Job Creation
• Fiscal Management

3. GDP / SCOTIABANK
• Source – Scotia Bank
Scotiabank – April 6, 2017
• Canada is on pace to same growth for
the past 15+ years
• Federal government deficits did little in
terms of helping the economy
• Federal government taxation plans for
national carbon may impact GDP down
the road.

4. ESTIMATED GDP / MARCH 2017
• Stats Canada
• Infrastructure funding to flow in 2017
• Oil and Gas demand will continue in 2017
• Government are battling deficit/debt
• Utilities upgrades are required in MB and
AB. Ontario is scaling back its’ FIT program
• Government spending on R&D will take
time to flow through the economy

5. RETAIL SALES / CANADA
• Stats Canada
Comment:
• Automotive sales are
expected to grow
slowly in 2017
• Impact of carbon
taxation has not made
it through the retail
pricing
• Government changes
to tax credits as well
as other taxation may
impact disposable
income

6. TRADE IMBALANCE
Source – Stats Canada
• Oil along with other commodities
continue to rebound
• Automotive production is
forecasted to be off 1M units in
2017
• Canada has signed CETA, but
impact of CETA is yet to be
determined
• Federal government has done little
to promote expansion of exports
(ports, pipelines, roads and bridges.
FYI – only 10% of the $120B
infrastructure spending goes to
support exports
• NAFTA is up for review which
means the impact on Canadian
exports is still to be determined

7. MANUFACTURING SALES
• Stats Canada
• Finished goods down from 1Q17,
especially Transportation
• Oil Sector has rebounded due to
both price and volume
• USA housing market is a boom cycle.
Canada Forestry lacks a new
softwood lumber agreement
• Bumper exports of wheat along with
other crops

8. AVERAGE HOUSING PRICES
Average Canadian
house price climbs 9%
to $439,144 in March
from year earlier
March 2015
CBC News – April 15, 2015
March 2016
CBC News – April 15, 2016
Average house
price in Canada
jumps 15% to
$508,567 in March
from year earlier
March 2017
Globe and Mail – April 13, 2016
The average house
price in Canada for
March 2017 is
$585,787 or about
15% from March 2017
• Housing affordability continues to worsen
• Wages, GDP and Inflation are not keeping pace with growth in housing prices

9. JOB CREATION
Source – Stats Canada
• 2/3 jobs created are related to the Service Sector
• Oil prices are up 40%, but job growth investment
continue to lag
Canada added 19,400 jobs in March, for an employment gain of
276,400 over the past 12 months, Statistics Canada said Friday
from Ottawa. Yet, the pace of annual wage rate increases fell to
1.1 percent, the lowest since the 1990s.
Bloomberg – April 7, 2017

10. FISCAL MANAGEMENT
• Federal Government of Canada
• Government expenses are growing at
6% per annum
• Government continues to eliminate
tax credits like transit
• Government is scaling back capital
spending on the military
• Government continues to pledge over
5B+ in foreign aid
• Government spending has done little
to help GDP to grow
• Today’s debt/deficit are tomorrows
taxes and spending cuts.
• There is no path to fiscal balance
• The government plans to legalized
marijuana in 2018.

11. SUMMARY
• Middle class continues to struggle as more of their tax credits have been removed
• Federal Government spending on infrastructure and/or other program spending has done little to in terms of GDP. GDP
is projected to grow at 2.3% which is the same pace for the past 15+ years
• Federal government has no path to a balance budget
• Job have been created, but the key sectors like natural resources lag behind other sectors in terms of job growth
• The impact of carbon taxation as well as payroll taxes will impact the low to middle class Canadians the most when fully
implemented
• Federal Government focus on innovation is risky area. Innovation can mean different things to a business. It is not always
about product launches!
• Federal government needs to do more to promote exports. Exports should be 25% higher. For each $1B dollar of export
there is 5,500 jobs
• Provinces have agree to a new Provincial Free Trade Agreement. Caution should be taken as deal has many issues,
especially with licensing and export of alcohol cross borders.
• There is no indication based on the stats that people have been lifted out of poverty or seen their overall tax burden go
down.