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Economic Overview
2017-2021 FINANCIAL PLAN
It remains to be seen whether the Trump administration will follow through on its
promises of an “America First” approach. Trade protectionism and repatriation of
outsourced jobs may not be necessary given the current positive outlook for
employment. There are looming uncertainties surrounding President Trump’s economic
and foreign policies. During his campaign, Trump vowed to withdraw from the North
American Free Trade Agreement (“NAFTA”). His stance has since pivoted with the
apparent objective now shifting to a renegotiation of NAFTA’s terms instead of an all-out
exit from the agreement.
CANADA
Canada’s GDP is forecasted to grow at a rate of 1.8% in 2017. Alberta and
Saskatchewan’s economies are anticipated to grow at a rate of 2.2% and 1.7%
respectively. As long as oil price improvements materialize as expected, both provinces
should see a turnaround after the past two difficult years. The national unemployment
rate is forecasted to remain close to 6.9% while inflation is expected to come in at 1.5%.
With Alberta and Ontario introducing carbon pricing this year, the cost of living is
expected to increase. A Carbon Tax will apply to gas, diesel, natural gas and propane.
Increased fuel and transportation costs are expected to trickle down to consumer goods
and services. Food prices are forecasted to rise 3% due to a lower Canadian Dollar.
The Bank of Canada (“BOC”) is expected to keep its key interest rate at 0.5% during 2017
due to ongoing excess capacity and slack within the economy. The Canadian dollar is
expected to trade below 75 cents US during the year.
Source: Bank of Canada
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