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Economic and Fiscal Overview: Progress for the Middle Class - Text Version
Chart 1a - Real Gross Domestic Product (GDP) Growth
| Year | Real gdp growth |
|---|---|
| 2014 | 2.6 |
| 2015 | 0.9 |
| 2016 | 1.4 |
| 2016 Q1 | 2.7 |
| 2016 Q2 | -1.2 |
| 2016 Q3 | 3.8 |
| 2016 Q4 | 2.6 |
Chart 1b - Index of Monthly Real GDP by Sector
| Date | Total | All other sectors | Energy-related goods-producing industries |
|---|---|---|---|
| Dec-2014 | 100 | 100 | 100 |
| Jan-2015 | 99.6 | 99.8 | 98.4 |
| Feb-2015 | 99.6 | 99.8 | 97.2 |
| Mar-2015 | 99.5 | 100 | 94.7 |
| Apr-2015 | 99.4 | 100 | 93.4 |
| May-2015 | 99.3 | 100 | 93.3 |
| Jun-2015 | 99.8 | 100.3 | 94.6 |
| Jul-2015 | 100.1 | 100.6 | 95.1 |
| Aug-2015 | 100.3 | 100.8 | 95.2 |
| Sep-2015 | 99.8 | 100.7 | 91.2 |
| Oct-2015 | 99.8 | 100.7 | 91.1 |
| Nov-2015 | 100.3 | 101 | 92.7 |
| Dec-2015 | 100.4 | 101.3 | 91.9 |
| Jan-2016 | 100.9 | 101.8 | 92.8 |
| Feb-2016 | 100.8 | 101.7 | 91.3 |
| Mar-2016 | 100.6 | 101.7 | 90.7 |
| Apr-2016 | 100.7 | 101.9 | 89.2 |
| May-2016 | 100.2 | 101.8 | 84.8 |
| Jun-2016 | 100.9 | 102.2 | 87.5 |
| Jul-2016 | 101.3 | 102.3 | 91.4 |
| Aug-2016 | 101.6 | 102.5 | 92.8 |
| Sep-2016 | 101.9 | 102.7 | 94.5 |
| Oct-2016 | 101.7 | 102.6 | 93.4 |
| Nov-2016 | 102.2 | 103 | 94.4 |
| Dec-2016 | 102.3 | 103.3 | 92.9 |
Chart 2a - Evolution of Employment Since December 2015
| Canada | Major oil-producing provinces | Rest of Canada | |
|---|---|---|---|
| Dec-2015 | 100 | 100 | 100 |
| Jan-2016 | 100 | 99.5 | 100.1 |
| Feb-2016 | 100 | 99.5 | 100.1 |
| Mar-2016 | 100.2 | 100.1 | 100.2 |
| Apr-2016 | 100.2 | 99.6 | 100.4 |
| May-2016 | 100.3 | 99 | 100.6 |
| Jun-2016 | 100.4 | 98.9 | 100.6 |
| Jul-2016 | 100.2 | 98.8 | 100.5 |
| Aug-2016 | 100.4 | 99 | 100.7 |
| Sep-2016 | 100.8 | 99.3 | 101.1 |
| Oct-2016 | 101 | 99.4 | 101.4 |
| Nov-2016 | 101 | 99 | 101.4 |
| Dec-2016 | 101.3 | 99.1 | 101.7 |
| Jan-2017 | 101.5 | 99.2 | 102 |
| Feb-2017 | 101.6 | 99.4 | 102.1 |
Chart 2b - Change in Full-Time Versus Part-Time Employment Since December 2015
| Major oil-producing provinces | Mar. | Man. | Que. | B.C. | Ont. | Can. | |
|---|---|---|---|---|---|---|---|
| Total employment | -19.3 | 1.4 | 4.1 | 83.1 | 106.3 | 117 | 292.6 |
| Full-time | -45 | -3.9 | 10.5 | 67.7 | 95.9 | 69.1 | 194.4 |
| Part-time | 25.7 | 5.3 | -6.4 | 15.4 | 10.4 | 47.9 | 98.2 |
Chart 3a - Growth in Nominal Retail Sales by Region
| per cent, year over year (December 2016) | |
|---|---|
| Canada | 4.3 |
| Major oil-producing provinces | 2.1 |
| Rest of Canada | 4.8 |
Chart 3b - Growth of Real Household Consumption and Disposable Income
| Real final consumption | Real disposable income | |
|---|---|---|
| 2013 Q1 | 2.5 | 6.4 |
| 2013 Q2 | 3.6 | 1.3 |
| 2013 Q3 | 3 | 0.6 |
| 2013 Q4 | 2.6 | 3.7 |
| 2014 Q1 | 1.8 | -2.4 |
| 2014 Q2 | 4 | 2.4 |
| 2014 Q3 | 2.6 | 3.5 |
| 2014 Q4 | 2.4 | 2.6 |
| 2015 Q1 | 0.3 | 2.3 |
| 2015 Q2 | 2 | 6.2 |
| 2015 Q3 | 2.7 | 1.7 |
| 2015 Q4 | 1.7 | 4.4 |
| 2016 Q1 | 2.3 | -0.1 |
| 2016 Q2 | 2.1 | 2.7 |
| 2016 Q3 | 2.7 | 5.5(1) |
| 2016 Q4 | 2.6 | 4.7 |
Chart 4a - Nominal Investment in Oil and Gas Extraction Industries
| $ billions, unadjusted for seasonality | |
|---|---|
| 2013 Q1 | 19.3 |
| 2013 Q2 | 14.7 |
| 2013 Q3 | 18.0 |
| 2013 Q4 | 19.6 |
| 2014 Q1 | 19.8 |
| 2014 Q2 | 16.9 |
| 2014 Q3 | 19.6 |
| 2014 Q4 | 22.2 |
| 2015 Q1 | 15.6 |
| 2015 Q2 | 12.4 |
| 2015 Q3 | 13.2 |
| 2015 Q4 | 11.4 |
| 2016 Q1 | 10.1 |
| 2016 Q2 | 8.5 |
| 2016 Q3 | 9.7 |
| 2016 Q4 | 10.1 |
Chart 4b - Crude Oil Futures
The chart shows the evolution of actual West Texas Intermediate crude oil prices. It shows that monthly prices declined from about US$105 per barrel in mid-2014 to about US$30 in January and February 2016, before firming up through the rest of 2016 and early 2017 to just over US$50 as of February 2017.
It also shows what financial market expectations were at the time of Budget 2016 and as of Budget 2017.
The futures curve as of March 22, 2016 (when spot prices were just below US$40) showed an expected steady recovery in prices up to the US$50 range by December 2021.
The futures curve as of March 15, 2017 shows that prices are expected to remain relatively flat at around US$50 through December 2021.
Chart 5a - Sales Volumes of Existing Homes
This chart shows Multiple Listing Service sales volumes of existing homes from January 2014 to February 2017 for Canada, Vancouver, Toronto, major oil-producing provinces and other provinces. The data are shown as indices, where January 2014 equals 100 for all series.
Sales in Vancouver increased sharply in 2015 and early 2016, fell sharply over March to August 2016, and are currently slightly below the level of January 2014.
In Toronto, sales have increased strongly over the period and are currently 45% higher than the January 2014 level.
In major oil-producing provinces, sales fell in late 2014 and remained generally soft thereafter. In other provinces, sales have been on a modest upward trend. For Canada as a whole, the trend in sales is similar to that of “other provinces”, though at a slightly faster pace.
Chart 5b - Household Debt-to-Income and Debt Service Ratios
| Household debt-to-income ratio (left scale) | Household debt service ratio (right scale) | |
|---|---|---|
| 2007 Q1 | 136.6 | 14.1 |
| 2007 Q2 | 139.6 | 14.5 |
| 2007 Q3 | 142.0 | 14.8 |
| 2007 Q4 | 143.3 | 14.9 |
| 2008 Q1 | 145.1 | 14.8 |
| 2008 Q2 | 147.2 | 14.6 |
| 2008 Q3 | 148.0 | 14.4 |
| 2008 Q4 | 148.2 | 14.3 |
| 2009 Q1 | 148.4 | 14.1 |
| 2009 Q2 | 151.4 | 14.0 |
| 2009 Q3 | 154.3 | 13.8 |
| 2009 Q4 | 156.5 | 13.7 |
| 2010 Q1 | 155.2 | 13.7 |
| 2010 Q2 | 156.9 | 14.1 |
| 2010 Q3 | 158.0 | 14.0 |
| 2010 Q4 | 158.3 | 13.9 |
| 2011 Q1 | 157.7 | 14.0 |
| 2011 Q2 | 159.1 | 14.0 |
| 2011 Q3 | 159.7 | 14.0 |
| 2011 Q4 | 160.1 | 13.9 |
| 2012 Q1 | 159.2 | 13.8 |
| 2012 Q2 | 160.4 | 13.9 |
| 2012 Q3 | 161.1 | 13.8 |
| 2012 Q4 | 161.0 | 13.9 |
| 2013 Q1 | 159.9 | 13.9 |
| 2013 Q2 | 160.8 | 13.9 |
| 2013 Q3 | 161.4 | 14.0 |
| 2013 Q4 | 161.0 | 13.9 |
| 2014 Q1 | 160.5 | 14.1 |
| 2014 Q2 | 161.4 | 14.1 |
| 2014 Q3 | 162.7 | 14.1 |
| 2014 Q4 | 162.8 | 14.1 |
| 2015 Q1 | 161.9 | 14.1 |
| 2015 Q2 | 163.5 | 14.0 |
| 2015 Q3 | 164.5 | 14.0 |
| 2015 Q4 | 164.5 | 13.9 |
| 2016 Q1 | 164.1 | 14.0 |
| 2016 Q2 | 166.2 | 14.2 |
| 2016 Q3 | 166.8 | 14.1 |
| 2016 Q4 | 167.3 | 14.0 |
Chart 6a - U.S. Real GDP Growth Outlook
| Actual | 2016 Fall Economic Statement | Budget 2017 | |
|---|---|---|---|
| 2016 Q1 | 0.8 | ||
| 2016 Q2 | 1.4 | ||
| 2016 Q3 | 3.5 | ||
| 2016 Q4 | 1.9 | ||
| 2016 | 1.6 | ||
| 2017 | 2.2 | 2.3 | |
| 2018 | 2.0 | 2.3 |
Chart 6b - U.S. Wage Growth and Unemployment Rate
| Average hourly wage growth (right scale, per cent year over year) | Unemployment rate (left scale, per cent) | |
|---|---|---|
| Mar-2007 | 3.4 | 4.4 |
| Apr-2007 | 3.1 | 4.5 |
| May-2007 | 3.5 | 4.4 |
| Jun-2007 | 3.6 | 4.6 |
| Jul-2007 | 3.3 | 4.7 |
| Aug-2007 | 3.3 | 4.6 |
| Sep-2007 | 3.1 | 4.7 |
| Oct-2007 | 3.0 | 4.7 |
| Nov-2007 | 3.1 | 4.7 |
| Dec-2007 | 2.9 | 5.0 |
| Jan-2008 | 2.9 | 5.0 |
| Feb-2008 | 2.9 | 4.9 |
| Mar-2008 | 3.0 | 5.1 |
| Apr-2008 | 2.9 | 5.0 |
| May-2008 | 3.1 | 5.4 |
| Jun-2008 | 2.7 | 5.6 |
| Jul-2008 | 3.1 | 5.8 |
| Aug-2008 | 3.3 | 6.1 |
| Sep-2008 | 3.3 | 6.1 |
| Oct-2008 | 3.3 | 6.5 |
| Nov-2008 | 3.5 | 6.8 |
| Dec-2008 | 3.6 | 7.3 |
| Jan-2009 | 3.6 | 7.8 |
| Feb-2009 | 3.4 | 8.3 |
| Mar-2009 | 3.3 | 8.7 |
| Apr-2009 | 3.4 | 9.0 |
| May-2009 | 2.9 | 9.4 |
| Jun-2009 | 2.9 | 9.5 |
| Jul-2009 | 2.7 | 9.5 |
| Aug-2009 | 2.4 | 9.6 |
| Sep-2009 | 2.4 | 9.8 |
| Oct-2009 | 2.5 | 10.0 |
| Nov-2009 | 2.1 | 9.9 |
| Dec-2009 | 2.0 | 9.9 |
| Jan-2010 | 2.1 | 9.8 |
| Feb-2010 | 2.1 | 9.8 |
| Mar-2010 | 1.8 | 9.9 |
| Apr-2010 | 1.8 | 9.9 |
| May-2010 | 1.9 | 9.6 |
| Jun-2010 | 1.8 | 9.4 |
| Jul-2010 | 1.8 | 9.4 |
| Aug-2010 | 1.8 | 9.5 |
| Sep-2010 | 1.8 | 9.5 |
| Oct-2010 | 1.9 | 9.4 |
| Nov-2010 | 1.8 | 9.8 |
| Dec-2010 | 1.7 | 9.3 |
| Jan-2011 | 1.9 | 9.1 |
| Feb-2011 | 1.8 | 9.0 |
| Mar-2011 | 1.8 | 9.0 |
| Apr-2011 | 1.9 | 9.1 |
| May-2011 | 2.0 | 9.0 |
| Jun-2011 | 2.1 | 9.1 |
| Jul-2011 | 2.3 | 9.0 |
| Aug-2011 | 1.9 | 9.0 |
| Sep-2011 | 1.9 | 9.0 |
| Oct-2011 | 2.1 | 8.8 |
| Nov-2011 | 2.0 | 8.6 |
| Dec-2011 | 2.1 | 8.5 |
| Jan-2012 | 1.8 | 8.3 |
| Feb-2012 | 1.8 | 8.3 |
| Mar-2012 | 2.1 | 8.2 |
| Apr-2012 | 2.1 | 8.2 |
| May-2012 | 1.7 | 8.2 |
| Jun-2012 | 2.0 | 8.2 |
| Jul-2012 | 1.7 | 8.2 |
| Aug-2012 | 1.9 | 8.1 |
| Sep-2012 | 2.0 | 7.8 |
| Oct-2012 | 1.5 | 7.8 |
| Nov-2012 | 1.9 | 7.7 |
| Dec-2012 | 2.1 | 7.9 |
| Jan-2013 | 2.1 | 8.0 |
| Feb-2013 | 2.2 | 7.7 |
| Mar-2013 | 1.9 | 7.5 |
| Apr-2013 | 2.0 | 7.6 |
| May-2013 | 2.1 | 7.5 |
| Jun-2013 | 2.2 | 7.5 |
| Jul-2013 | 2.0 | 7.3 |
| Aug-2013 | 2.3 | 7.3 |
| Sep-2013 | 2.1 | 7.2 |
| Oct-2013 | 2.2 | 7.2 |
| Nov-2013 | 2.2 | 6.9 |
| Dec-2013 | 2.0 | 6.7 |
| Jan-2014 | 2.0 | 6.6 |
| Feb-2014 | 2.2 | 6.7 |
| Mar-2014 | 2.1 | 6.7 |
| Apr-2014 | 2.0 | 6.2 |
| May-2014 | 2.1 | 6.3 |
| Jun-2014 | 2.0 | 6.1 |
| Jul-2014 | 2.1 | 6.2 |
| Aug-2014 | 2.2 | 6.2 |
| Sep-2014 | 2.0 | 5.9 |
| Oct-2014 | 2.0 | 5.7 |
| Nov-2014 | 2.0 | 5.8 |
| Dec-2014 | 1.9 | 5.6 |
| Jan-2015 | 2.2 | 5.7 |
| Feb-2015 | 1.9 | 5.5 |
| Mar-2015 | 2.2 | 5.4 |
| Apr-2015 | 2.3 | 5.4 |
| May-2015 | 2.3 | 5.5 |
| Jun-2015 | 2.1 | 5.3 |
| Jul-2015 | 2.2 | 5.2 |
| Aug-2015 | 2.2 | 5.1 |
| Sep-2015 | 2.3 | 5.0 |
| Oct-2015 | 2.6 | 5.0 |
| Nov-2015 | 2.4 | 5.0 |
| Dec-2015 | 2.5 | 5.0 |
| Jan-2016 | 2.5 | 4.9 |
| Feb-2016 | 2.4 | 4.9 |
| Mar-2016 | 2.5 | 5.0 |
| Apr-2016 | 2.6 | 5.0 |
| May-2016 | 2.5 | 4.7 |
| Jun-2016 | 2.6 | 4.9 |
| Jul-2016 | 2.8 | 4.9 |
| Aug-2016 | 2.5 | 4.9 |
| Sep-2016 | 2.7 | 4.9 |
| Oct-2016 | 2.7 | 4.8 |
| Nov-2016 | 2.7 | 4.6 |
| Dec-2016 | 2.9 | 4.7 |
| Jan-2017 | 2.6 | 4.8 |
| Feb-2017 | 2.8 | 4.7 |
Chart 7a - Real Canadian Non-Energy Goods Exports and U.S. Non-Petroleum Goods Imports
| More sensitive to the exchange rate | Less sensitive to the exchange rate | Canadian non-energy goods exports | U.S. imports of non-petroleum goods | |
|---|---|---|---|---|
| 2013 Q1 | 90.0 | 94.4 | 92.4 | 92.0 |
| 2013 Q2 | 91.4 | 96.6 | 94.3 | 93.4 |
| 2013 Q3 | 91.1 | 93.6 | 92.5 | 93.9 |
| 2013 Q4 | 92.5 | 94.7 | 93.7 | 94.9 |
| 2014 Q1 | 93.2 | 92.2 | 92.7 | 96.2 |
| 2014 Q2 | 100.0 | 100.0 | 100.0 | 100.0 |
| 2014 Q3 | 100.6 | 101.4 | 101.1 | 99.9 |
| 2014 Q4 | 102.8 | 99.5 | 101.0 | 102.5 |
| 2015 Q1 | 103.6 | 96.7 | 99.8 | 104.4 |
| 2015 Q2 | 106.4 | 98.0 | 101.7 | 105.2 |
| 2015 Q3 | 109.9 | 98.6 | 103.6 | 105.0 |
| 2015 Q4 | 107.1 | 101.1 | 103.8 | 105.2 |
| 2016 Q1 | 109.2 | 103.0 | 105.7 | 104.6 |
| 2016 Q2 | 106.1 | 97.6 | 101.3 | 104.5 |
| 2016 Q3 | 108.5 | 99.8 | 103.7 | 104.4 |
| 2016 Q4 | 107.7 | 99.2 | 103.0 | 107.2 |
Chart 7b - Canada’s Non-Energy Trade Balance With the U.S.
| Non-energy trade balance | Non-energy goods | Services | |
|---|---|---|---|
| 2000 | 41.1 | 45.5 | -4.4 |
| 2001 | 44.4 | 48.1 | -3.7 |
| 2002 | 44.2 | 47.3 | -3.1 |
| 2003 | 29.1 | 33.9 | -4.8 |
| 2004 | 36.4 | 40.5 | -4.1 |
| 2005 | 30.9 | 34.9 | -4.0 |
| 2006 | 14.5 | 20.8 | -6.3 |
| 2007 | -0.9 | 7.0 | -7.9 |
| 2008 | -28.2 | -18.3 | -9.9 |
| 2009 | -40.7 | -29.4 | -11.3 |
| 2010 | -54.3 | -39.3 | -14.9 |
| 2011 | -53.0 | -38.1 | -14.9 |
| 2012 | -61.9 | -47.4 | -14.5 |
| 2013 | -61.1 | -45.9 | -15.2 |
| 2014 | -61.7 | -47.5 | -14.3 |
| 2015 | -43.9 | -31.6 | -12.4 |
| 2016 | -31.4 | -20.1 | -11.3 |
Chart 8a - 10-Year Government Bond Yields
The chart shows the evolution of Canadian, U.S. and German 10-year government bond rates since January 2013.
The three series show bond yields declining gradually from late 2013 to mid-2016, aside from a temporary spike at the beginning of 2015. In mid-2016, Canadian and U.S. bond yields troughed at 0.97% and 1.37%, respectively. Yields on 10-year German bunds turned slightly negative from July to October 2016.
Since then, yields on bonds rose by roughly 100 basis points for Canada and the U.S., and about 50 basis points for Germany. At the time of Budget 2017, Canadian 10-year bond yields were slightly below 2%, U.S. yields were around 2.5%, and German yields were around 0.5%.
Chart 8b - Evolution of Major Stock Markets
The chart shows the evolution of three daily equity market indexes (Canada S&P/TSX, U.S. S&P 500 and an emerging economy composite) since January 2016.
The three series show an upward trend through most of the period.
The data are shown as indices, where January 4, 2016 equals 100 for all series.
As of March 14, 2017, the Canada market, the U.S. market and the emerging economy composite had posted gains of 19%, 18% and 13%, respectively.
In recent weeks, all three indices have retreated from peaks recorded in late February or early March.
Chart 9 - Federal Budgetary Balance Under Various Economic Growth Scenarios
| 2015-2016 | 2016-2017 | 2017-2018 | 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | |
|---|---|---|---|---|---|---|---|
| Budget 2017 survey | -1 | -23 | -25.5 | -24.4 | -20.4 | -18.7 | -15.8 |
| Budget 2017 survey (top four) | -1 | -22.7 | -23.5 | -20.8 | -14.3 | -11.1 | -6.6 |
| Budget 2017 survey (bottom four) | -1 | -23.4 | -27.6 | -27.9 | -27.5 | -27.3 | -25.4 |
Chart 10 - Federal Debt-to-GDP Ratio Under Various Economic Growth Scenarios
| 2015-2016 | 2016-2017 | 2017-2018 | 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | |
|---|---|---|---|---|---|---|---|
| Budget 2017 survey | 31 | 31.5 | 31.4 | 31.3 | 31.1 | 30.8 | 30.3 |
| Budget 2017 survey (top four) | 31 | 31.4 | 31.1 | 30.7 | 30.1 | 29.3 | 28.4 |
| Budget 2017 survey (bottom four) | 31 | 31.5 | 31.7 | 31.9 | 32.4 | 32.5 | 32.4 |