The Real Economy, Canada: Volume 9
Closing the output gap with help from our friends to the south
THE REAL ECONOMY |
The RSM Financial Conditions Index (a composite of stress factors in Canada’s equity, bond, commodity and money markets), points to an economic revival in the near term as long as the pandemic can be contained among Canada’s major trading partners and global growth and infrastructure investment continues.
Also in this issue: How the pandemic has hurt the finances of municipalities, how digital forensics can preserve data and help receivers and lenders, transporting oil by railcar expected to increase through 2021, along with the big new deal in rail.
Key takeaways from the The Real Economy, Canada - Q1, 2021
- The $25 billion Canadian Pacific Railway deal and indirect gains from Biden administration’s COVID relief bill indicate further integration of both economies.
- Canada’s economy expected to grow by 6.5 per cent in 2021, though slow vaccination rate limits full economic potential.
- Labour market struggles, cash-strapped municipalities and a large GDP gap are some of the main obstacles the federal government must address.
IN THIS ISSUE
While the U.S. economy is expected to exceed its pre-pandemic projection by 0.2% this year, Canada is expected to undershoot by 3.2%.
Perhaps no measure will have a greater impact on the Canadian economy than the Biden administration’s $1.9 trillion stimulus package.
The Bank of Canada is maintaining its overnight target rate of 25% and will retain its current policy of accommodation till its necessary.
The pandemic has significantly hurt the finances of cities and towns in Canada with costs rising and revenues plummeting.
To help with insolvency, banks or the receivers should look to digital forensics to gather evidence, build their case and maximize recovery.
We expect crude-by-rail exports for 2021 to continue rebounding as crude production increases and export pipeline capacity remains limited.
By creating the first railroad network among Canada, Mexico and the U.S., the deal promises to connect manufacturing and agricultural nodes.