Jump to content
Apple Music
ūüé§ Use code GAGAVEGAS at SeatGeek.com to get $20 off tickets ūüé§
economy

Canada Facing Labor Shortage... US & Canada Raise Rates To 2.75% By 2019

Featured Posts

Economy

https://www.bnnbloomberg.ca/canadian-firms-expect-to-ramp-up-investment-bank-of-canada-survey-1.1152538

 

Canadians companies are wanting to expand further amid tight demand for products and services yet are struggling to find enough labor, a problem common in North America as the same thing is happening in the USA

 

Unemployment is at a 40 year low at 5.8% (4.8% by American methodology of measuring unemployment)...

 

Yet factoring in that the labor force participation rate is higher in Canada than in the US despite having a slightly older population (more retirees), the labor force pool is actually tighter than in the US despite unemployment being 1% higher.

 

The US still has discouraged workers coming back to workforce increasing labor force participation rate. Because Canada is largely past that now, inflationary pressures are rising and as such interest rates are due to rise 4 times next year and one more time next year bringing the forecasted rate to 2.75% in line with where it is also expected to be in the US by end of 2019

jesse_batista

Share


Link to post
Share on other sites
Luc

That's amazing. How are the wages doing? And does the government have a budget surplus yet? Maybe letting off some govt department workers and introducing small tax hikes could make the economy less overheated while making the next crisis easier to face? 

 

I mean, letting in migrants is another possibility but is the labour shortage in Canada mostly among jobs requiring higher education or among jobs that require a lower education? That could matter quite a lot in deciding whether more migrants as well as what kind are desirable.

Edited by Luc

Share


Link to post
Share on other sites
Economy
2 minutes ago, Luc said:

That's amazing. How are the wages doing? And does the government have a budget surplus yet? Maybe letting off some govt department workers and introducing small tax hikes could make the economy less overheated while making the next crisis easier to face? 

 

I mean, letting in migrants is another possibility but is the labour shortage in Canada mostly among jobs requiring higher education or among jobs that require a lower education? That could matter quite a lot in deciding whether more migrants as well as what kind are desirable.

If we weren't loosing $20 Billion a year with oil discounts we might almost have a surplus. Brent is at like $80 and WTI over $70 but Canadian Oil on Friday was $21/barrel as pipeline shortage has reached a critical level :air:.

 

The deficit is still less than 1% of GDP tho so the debt to GDP ratio of 31% is still falling as the economy grows much faster than the debt

 

And the labor shortage is more accute among high skilled education Jobs and trades like construction, electricians, mechanics etc

 

But even regular jobs are easier to find now. Wages are rising faster but as u can imagine the top 30% still taking a bigger slice of the pie

 

Immigration was raised to 330,000 a year and our population grew 518,000 last year plus we have severe housing shortage so I think for now raising it any further is not a good idea

 

Maybe this is good. Business investment had been dragging behind the US and labor shortage may force new investment in machinery to raise productivity!

jesse_batista

Share


Link to post
Share on other sites
Luc
3 hours ago, Economy said:

If we weren't loosing $20 Billion a year with oil discounts we might almost have a surplus. Brent is at like $80 and WTI over $70 but Canadian Oil on Friday was $21/barrel as pipeline shortage has reached a critical level :air:.

 

The deficit is still less than 1% of GDP tho so the debt to GDP ratio of 31% is still falling as the economy grows much faster than the debt

 

And the labor shortage is more accute among high skilled education Jobs and trades like construction, electricians, mechanics etc

 

But even regular jobs are easier to find now. Wages are rising faster but as u can imagine the top 30% still taking a bigger slice of the pie

 

Immigration was raised to 330,000 a year and our population grew 518,000 last year plus we have severe housing shortage so I think for now raising it any further is not a good idea

 

Maybe this is good. Business investment had been dragging behind the US and labor shortage may force new investment in machinery to raise productivity!

Yeah, higher productivity would be good but seeing as more immigration/more workers aren't really a solution I think the best thing would be to cool down the economy by reducing spending in a few areas (labour shortage, so what better moment to reduce the amount of govt employees?) as well as raising taxes (possibly environmental taxes?). Might not be politically feasible, but it could slow down the economy a little bit and avoid bubbles.

 

By the way, how is the housing market doing? Wasn't it declining in biggest cities not too long ago? :huh: Is it still?

Share


Link to post
Share on other sites
Economy
46 minutes ago, Luc said:

Yeah, higher productivity would be good but seeing as more immigration/more workers aren't really a solution I think the best thing would be to cool down the economy by reducing spending in a few areas (labour shortage, so what better moment to reduce the amount of govt employees?) as well as raising taxes (possibly environmental taxes?). Might not be politically feasible, but it could slow down the economy a little bit and avoid bubbles.

 

By the way, how is the housing market doing? Wasn't it declining in biggest cities not too long ago? :huh: Is it still?

We have a  minimum National Carbon Tax at $10 per Carbon Tone (Provinces can set it higher if they wish and will will rise steadily each year until it reaches $50 per carbon tone in 2021 (or 2022 I forget which year now)

 

But Ontario and Saskatchewan are basically refusing to do it now and Alberta at first was co-operative but they are pulling out of raising the carbon tax any further until the pipeline issues get resolved. They complain it's rediculous to sell oil for so little and companies run such big losses and they blame the rest of the Nation for the problem

 

Any other taxes I think are a bad idea tbh. We have the opposite issue of the US. Our Government is in great shape but our consumers and private sector is highly leveraged and the government is trying to engineer a soft landing. Rising taxes and taking money away from private sector could trigger the imbalances to fall on itself and go right back into recession. Gradually raising rates I think is better under the circumstances

 

As for the housing market prices started falling after the new stress test laws (you must qualify for a mortgage rate 2% higher than you actually get). It's one of the things the government is doing to take heat off borrowing and housing market. But they resumed modest gains recently but only at the rate of inflation. Sales have been recovering tho after an initial fall

 

Prices remain too high but credit quality is good, wages are rising, rates are going up slowly and banks are well capitalised

 

Also we do not have an overbuilding problem like sometimes happens with hot housing markets (we have a shortage).

 

There's also a lot of rule tightening done over last 8 years to keep housing market under control. If housing market starts sliding too fast, they can always ease some of those rules

 

So I think a hard crash is unlikely

 

Growth lately has been coming from exports, manufacturing and the high tech sector. That has supported the economy even as consumer spending and housing market cools

jesse_batista
  • Thanks 1

Share


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×