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  • Unpacking the details of Manitoba Hydro September 9, 2019
    What would a long view of Manitoba Hydro all entail.  Read report here.
    Canadian Centre for Policy Alternatives
  • CCPA submission to Treasury Board consultation on regulatory modernization September 6, 2019
    On June 29, 2019, the federal government launched a public consultation on initiatives intended to "modernize" the Canadian regulatory system. Interested Canadians were invited to provide input on four current initiatives: Targeted Regulatory Reviews (Round 2) Review of the Red Tape Reduction Act Exploring options to legislate changes to regulator mandates Suggestions for the next […]
    Canadian Centre for Policy Alternatives
  • Join us in November for the 2019 CCPA-BC Gala, featuring Nancy MacLean September 3, 2019
    Tickets are available for our 2019 Annual Gala Fundraiser, which will take place in Vancouver on November 21. This year’s featured speaker will be Nancy MacLean, an award-winning historian and author whose talk, The rise of the radical right: How libertarian intellectuals, billionaires and white supremacists shaped today’s politics, is very timely both in the US and here in […]
    Canadian Centre for Policy Alternatives
  • Report looks at captured nature of BC’s Oil and Gas Commission August 6, 2019
    From an early stage, BC’s Oil and Gas Commission bore the hallmarks of a captured regulator. The very industry that the Commission was formed to regulate had a significant hand in its creation and, too often, the interests of the industry it regulates take precedence over the public interest. This report looks at the evolution […]
    Canadian Centre for Policy Alternatives
  • Correcting the Record July 26, 2019
    Earlier this week Kris Sims and Franco Terrazzano of the Canadian Taxpayers Federation wrote an opinion piece that was published in the Calgary Sun, Edmonton Sun, Winnipeg Sun, Ottawa Sun and Toronto Sun. The opinion piece makes several false claims and connections regarding the Corporate Mapping Project (CMP), which we would like to correct. The […]
    Canadian Centre for Policy Alternatives
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GDP: Consumers to the Rescue

Following positive GDP numbers in April and May, Statistics Canada reported today that a sharp drop in June dragged Canada’s economic growth to a mediocre pace of 0.4% for the second quarter.

June’s declines in manufacturing and resource extraction did further damage to industries that had declined in April and May. Construction also declined in June, pulling the whole goods-producing sector into negative territory for the quarter. Goods production was hobbled by a continuing trade deficit and a reduction in business investment.

The service sector also turned negative in June, but remained strongly positive for the quarter, more than offsetting the goods-producing sector’s decline. Service industries benefited from upticks in consumer and government spending. In particular, household final consumption expenditure surged by 0.9% in the second quarter, its largest quarterly jump since 2010.

However, it is not clear that such consumer spending can be sustained in subsequent quarters, given record household debt and rising mortgage rates. Similarly, existing austerity policies and the federal government’s commitment to eliminate its deficit by 2015 for electoral reasons cast doubt on whether public expenditure will continue to support economic growth.

In summary, Canada eked out mediocre economic growth in the second quarter mainly because of a surge in consumer spending that seems unlikely to continue.

UPDATE (August 31): Quoted in today’s National Post (FP2), Montreal Gazette (C2), Ottawa Citizen (F1), Windsor Star (A15), Saskatoon StarPhoenix (B1), Edmonton Journal (C3) and Vancouver Sun (C2).

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