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  • Community Economic Development in Manitoba - a new film January 16, 2018
    Cinameteque, Jan 23.  7:00 pm - Free event Film Trailer CCEDNET-MB, CCPA-MB, The Manitoba Research Alliance and Rebel Sky Media presents: The Inclusive Economy:  Stories of Community Economic Development in Manitoba
    Canadian Centre for Policy Alternatives
  • Winnipeg's State of the Inner City 2018 January 3, 2018
    Winnipeg's community-based organizations are standing on shakey ground and confused about how to proceed with current provincial governement measurements.  Read the 2018 State of the Inner City Report.
    Canadian Centre for Policy Alternatives
  • Our Schools/Our Selves: Winter 2018 is online now! December 18, 2017
    For the first time, this winter we are making Our Schools/Our Selves available in its entirety online. This issue of Our Schools/Our Selves focuses on a number of key issues that education workers, parents, students, and public education advocates are confronting in schools and communities, and offers on-the-ground commentary and analysis of what needs to […]
    Canadian Centre for Policy Alternatives
  • Charting a path to $15/hour for all BC workers November 22, 2017
    In our submission to the BC Fair Wages Commission, the CCPA-BC highlighted the urgency for British Columbia to adopt a $15 minimum wage by March 2019. Read the submission. BC’s current minimum wage is a poverty-level wage. Low-wage workers need a significant boost to their income and they have been waiting a long time. Over 400,000 […]
    Canadian Centre for Policy Alternatives
  • CCPA-BC joins community, First Nation, environmental groups in call for public inquiry into fracking November 5, 2017
    Today the CCPA's BC Office joined with 16 other community, First Nation and environmental organizations to call for a full public inquiry into fracking in Britsh Columbia. The call on the new BC government is to broaden a promise first made by the NDP during the lead-up to the spring provincial election, and comes on […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

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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