City of Surrey 2017 - 2021 Financial Plan

Economic Overview

2017-2021 FINANCIAL PLAN

The weaker dollar should provide support to Canadian exports and manufacturing,

however, increased trade protectionism sentiments in the US may hinder growth in

these sectors. Once ratified by the European Parliament, The Canada-European Union

Comprehensive Economic and Trade Agreement (“CETA”) should help Canadian

exporters access a greater diversity of markets for their goods.

The BOC continues to see inflated home prices and high household debt levels as key

risks for the economy. Canadian household debt now exceeds $2 trillion, with 65% of

those liabilities in mortgages. The BOC’s latest financial review report finds that a third

of high-ratio mortgage holders would not qualify for their loans under the more

stringent qualification rules which were recently introduced. The central bank

anticipates that stricter lending rules will reduce the number of highly indebted

households over time.

The federal government recently provided approval for two major oil pipeline projects.

The Enbridge Line 3 project will replace the existing pipeline extending from Alberta to

Wisconsin and double its capacity. The Trans Mountain project will twin the pipeline

extending from Alberta to BC and triple the current capacity. Enbridge Line 3 has the

support of indigenous communities and should proceed once it satisfies the

government’s environmental conditions. The $6.8 billion Trans Mountain project will

likely be delayed as there are strong challenges from environmental and indigenous

groups who have vowed to challenge the government’s approval in court.

To address environmental concerns, Prime Minister Trudeau is committing $1.5 billion

over five years to an ocean protection plan for responses to tanker and fuel spills in the

Pacific, Atlantic, and Arctic Oceans. The initiative will be geared towards creating a

marine safety system, restoration of marine ecosystems and improving oil spill response

and research. British Columbia is slated to receive over $600 million of this funding.

Source: Bank of Canada