Canada will slip further in world ranking My guess is on the latter as the Harper government will try to avoid at all costs a deficit and balance the budget.ĥ. The only way to prevent this is with some creative accounting, increased taxes or some important cutbacks. The continued slide of the price of oil will threaten Ottawa’s fiscal position and push the federal books into deficit. The federal government has gone on somewhat of a spending spree in the last two months, leaving very little left over in case of emergencies. Possibility of a continued federal fiscal deficit Let’s stop seeing a high dollar as a source of national pride.Ĥ. I always found strange the reference to a ‘strong’ and ‘weak’ Canadian dollar based on how high or low it goes. In fact, I would call a low Canadian dollar the ‘strong’ dollar, as it generates exports and creates jobs. The US dollar will continue to strengthen at the expense of the Canadian dollar, which will continue to decline into the low 80s. The Canadian dollar will continue its slide Overall, I don’t see the benefits outweighing the negatives, and the net result will be a drag on the Canadian economy.ģ. Those three provinces will begin fiscal cutbacks in an attempt to compensate for the lost revenues and unemployment in those provinces will surely increase. Among the winners will be consumers who will gain some $15 a week in pocket money, which will certainly give a boost to some target industries. There will be a sizable decline in oil-industry investment and new exploration, which will reverberate through the country. There will be winners and losers. Among the losers in Canada will be Alberta, Saskatchewan and Newfoundland. All this adds up to a weak year for the Canadian economy. A marked slowdown toward the end of the year is not out of the question. There are too many uncertainties: the slump in oil, the over-indebtedness of households, the imminent collapse of Europe, and the fact that I don’t see the US recovery as being that strong (see below).
Most economists are predicting stronger growth in Canada in 2015, largely based on the US recovery. But I just don’t see that happening. This is not shaping up to be a great year for the Canadian economy. We need to expect slower economic growth.īased on my observations of the real world, here are my predictions for Canada in 2015:
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