A Weak Week for Canada’s Economy

On Tuesday, Statistics Canada reported that job vacancies have fallen to the lowest level recorded since it began collecting these figures two years ago.

On Wednesday, the Bank of Canada projected growth of just 1.5% for this year.

On Thursday, Statistics Canada reported that the number of Canadians receiving Employment Insurance (EI) benefits edged down in February. Meanwhile, the Labour Force Survey indicates that unemployment edged up in February and grew much worse in March.

The combination of rising unemployment and falling EI receipts reduced the proportion of unemployed Canadians receiving benefits to 39.7 per cent in February (i.e. 528,940 beneficiaries out of 1,332,600 unemployed workers). This reduction in EI coverage comes on the heels of new EI restrictions that make it harder for jobless Canadians to access benefits.

This morning, Statistics Canada reported flat wholesale trade and low inflation, providing further evidence of a subdued Canadian economy. Federal and provincial governments should avoid austerity policies that impose a further drag on our economy.

Instead, governments should undertake public investments that would boost economic activity and create jobs. With the Bank of Canada keeping interest rates low, now is an opportune time to finance needed public investments at minimum fiscal cost. Unfortunately, the new infrastructure money in last month’s federal budget is concentrated after 2019.

Have a good weekend everyone!