This report reviews recent developments in household finances and assesses prospects for financial vulnerability over the medium term based on PBO’s April 2017 Economic and Fiscal Outlook.
This report responds to the 10 May 2017 request by the Honourable Elizabeth Marshall to provide an update of the 13 December 2016 PBO report “Household Formation and the Housing Stock: A Stock-Flow Perspective”. The report provides updated estimates of household formation and the housing stock in Canada, as well as an updated medium-term outlook for the housing sector.
PBO looks at the projected impact on Canada of the Comprehensive Economic and Trade Agreement (CETA). Though the agreement is extensive, its impact in aggregate on the Canadian economy is likely to be small in comparison to NAFTA. Nonetheless, for individual sectors the impact could be significant since there are quite a few sectors whose goods currently have tariffs that exceed 10 per cent.
Canada’s trade in services with the European Union will also be affected as a number of non-tariff trade impediments are reduced. Since they are starting from a low level, the dollar change in trade would be relatively small. But as a proportion of existing trade, the change could be notable.
Canada will also extend market exclusivity on existing drugs by about 2 years. This will prevent the entry of cheaper generics into the market, and prolong a stream of royalty and dividend payments to entities outside Canada. It will thus also have a small impact on Canada’s external balance.
This report responds to the 4 February 2016 Standing Committee on Finance motion that “consistent with the Parliamentary Budget Office (PBO) mandate to provide independent analysis about the state of Canada’s finances and trends in the national economy (as outlined in section 79.2 of the Parliament of Canada Act), the PBO provide an economic and fiscal outlook to the Committee the fourth week of October and April of every calendar year, and be available to appear before the Committee to discuss its findings shortly thereafter.”
This report provides an in-year estimate of Canadian GDP in 2016 and the Government of Canada’s budgetary balance in 2016-17 based on data released since our October 2016 Economic and Fiscal Outlook.
This report provides estimates of household formation and the housing stock in Canada, and also attempts to gauge the degree of balance in the housing sector, both for new housing units and for the overall housing stock.
PBO finds that most labour market indicators remain fairly close to their trend levels, except for average hours worked which is below trend. Our analysis suggests that, at the national level, the labour market is currently operating below its sustainable capacity as the demographic transition takes hold.
In response to the 4 February 2016 Standing Committee on Finance motion, this report provides PBO’s economic and fiscal outlook.
Discussion Documents for Consultation on Renewed Mandate for the Parliamentary Budget Officer