Canada is heading to a period of slow growth

1. CANADA SLOW
GROWTH –
WHAT NEEDS
TO HAPPEN?
By: Paul Young, CPA, CGA
Date: April 10, 2019

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. INTRODUCTION
• This presentation will discuss issues facing the Canadian economy as it heads for
slower economic growth.

4. AGENDA
Slow Economic Growth
GDP Rates / Slow Growth
GDP by Segments
Employment
Careers
What are the next types of
businesses?
How does the government
support new businesses?
Training and Skills
development
Exports
Value of Exports
What can be done to expand
exports?
Retail Sales
Value of Exports
What can be done to expand
exports?
Housing Market
Housing Market Analysis
What can be done?
Government Spending
Housing Market Analysis
What can be done?

5. Source -
https://www.investmentexecutive.com/news
/research-and-markets/big-six-economists-
forecast-moderate-growth-for-
2019/?platform=hootsuite
PRIVATE ECONOMIST

6. IMF AND CANADA
Source - https://www.ctvnews.ca/business/imf-says-canadian-economy-to-grow-at-1-5-per-
cent-lower-than-previous-forecast-1.4372147
• Why did Liberal forced a carbon tax
on a slowing economy?
• Goods producing sector continues to
lose FDI -
https://www.bnnbloomberg.ca/stephe
n-harper-tells-private-audience-
investors-have-lost-faith-in-canada-
1.1241538

7. SLOW ECONOMIC GROWTH
• Liberal Economic Council – Key Quotes “The global expert who heads the
Trudeau government’s economic advisory council has offered a glimpse
into the group’s brainstorming sessions on how best to lift Canada’s
drooping growth prospects. Dominic Barton shared details of the team’s
focal points during his appearance this week at a public policy summit in
Ottawa. They include easing immigration rules to attract more talent,
retraining swaths of the workforce to adjust to the rapid rise in
automation and creating what he calls the world’s first infrastructure
agency designed to rake in private and foreign capital. Source:
http://www.canadianmanufacturing.com/regulation/trudeaus-economic-
guru-offers-sneak-peak-on-reviving-growth-177211/

8. SLOW GROWTH
• Growth is measure by change in GDP. Canada has been experiencing slow growth
for over 12+ years.
• Source - https://www.scotiabank.com/ca/en/about/global-economics/scotiabank-
forecast-tables.html
• You will see based on BNS Analysis
Factors impacting Growth
• Commodity Prices
• Consumer Demand
• Exports
• Demographics
• Government Policies

9. CANADA GDP BY SEGMENT
Source – Stats Canada
GDP Analysis
• Approximately 30% of GDP
is good producing
• Approximately 70% of GDP
is the service sector
How do you grow GDP?
• Opening new markets (Exports)
• Innovation/R&D to support next
generation of businesses
• Government policies related to
consumer spending

10. WHAT ARE
THE NEXT
TYPES OF
BUSINESSES
3-D Printing Energy Storage Expert Farming
Microgrids Digital media Virtual Reality
Pre-fab housing Drones Driver-less cars
eCommerce
Source -
http://www.slideshare.n
et/paulyoungcga/2016
-employment-outlook-
canada or
https://www.slideshare.
net/paulyoungcga/top-
predictions-2019 or

11. HOW DOES THE GOVERNMENT CREATE
POLICIES TO SUPPORT NEXT
GENERATION OF BUSINESS
• Cultivate innovation
• Focusing on private and public partnership through creation innovation centers at
all Colleges and Universities across Canada
• Continue to promote tax programs, like R&D Tax Credits or Stock Options or cuts
to EI for small to medium size business
• Continue to look at programs like SDTC or Next Generation Biofuels or Industry
specific funds
• Partnering with all levels of government to cut down red tape and regulation to
help businesses spend more time growing their business.
Source: http://www.slideshare.net/paulyoungcga/canadian-manufacturing-analysis-
including-trends-and-assessment-of-government-policies

12. REVAMPING EDUCATION
Education systems needs to be align with
needs of business
01
Provincial government need to revamp
apprenticeship programs as part opening
up the skills trades to more individuals
02
Tax Policies
•Hiring credits and/or other training credits should be
promoted as part of assisting companies with
development of their employees
•Source:
http://www.slideshare.net/paulyoungcga/governmen
t-policies-education-skills-development-canada-
october-2-2016
03

13. EXPORTS
• Analysis:
• Canada exports account for about 25%
of GDP. Canada is export driven
country.
• For each $1B in exports there is 5,500
indirect/direct jobs created
• Goods producing jobs pay on average
$350/week as compare to service
sector jobs - Sources:
http://www.slideshare.net/paulyoungc
ga/wages-and-employment-canada-
july-2016
Source – Stats Canada

14. EMPLOYMENT
• Goods producing jobs lag service sector jobs
• The federal government wants to bump up immigration. The economy on average is producing
approximately 217,000 jobs per year.

15. LIBERALS / MIDDLE CLASS
Source - https://www.liberal.ca/trudeau-unveils-liberal-platform-for-a-strong-middle-class/
“Stephen Harper wants
us to think that if it
weren’t for him, our
economy would fall
apart. But Canada’s
economy doesn’t depend
on him. It depends on
Canadians. It depends on
the people I meet all
across this country,
every single day,” said
Mr. Trudeau. “People
want economic growth,
good jobs, and more
money in their pockets.
They want to see their
voices and values
represented in Ottawa.
Canadians want a better
government, not just a
different one. It’s time for
real change, and that is
exactly what the Liberal
Liberal 2015
GDP by PM Wage Growth by Year

16. TOP CAREERS / CANADA
Source - http://globalnews.ca/news/2944692/the-top-eight-careers-of-the-
future-in-canada/ or https://www.trade-schools.net/ca/articles/careers-in-
demand.asp
Risks
• Healthcare funding –
Provinces are
strapped for cash
• Education funding –
declining enrolment
• Residential/non-
residential
investment has been
sluggish
1. Registered Nurse
2. Truck Driver
3. College or Vocational Instructor
4. Business Management Consultant
5. Welder
6. Licensed Practical Nurse
7. Occupational or Physiotherapy Assistant
8. Software Engineer or Designer
9. Aerospace Engineer
10. Industrial Electrician
11. Aircraft Pilot
12. Pharmacist
13. Psychologist
14. Steamfitter or Pipefitter
15. Construction Estimator
16. Veterinary Technician or Assistant
17. Dispensing Optician

17. WHAT CAN BE DONE TO SUPPORT
EXPORTS
Investment in infrastructure that supports moving goods to market (Bridges, ports, roads)
More Trade Agreements and FIPA Deals – FYI – Trade Deals to be fair deals
Cutting red and regulation down as part getting projects off the ground (mines, pipelines, food processing plants, etc.
Provincial Policies
Approval of Natural Resource projects
Controlling growth in Hydro Rates
Reducing red tape and regulations
Tax policies
Ensure Canada has competitive tax policies with the rest of the world
Encouraging more investment in capital assets by keeping the CCA rules for the
write-down of machinery and equipment

18. RETAIL SALES
Areas of focus:
Retail sales are approximately $540B and growing at about rate of
1.5% to 2.2%
Retail market is going through changes with more and more
adoption of eCommerce
Retail Market is influence by taxation (Duties, Tariffs, carbon
taxation, etc.)
Source: Stats Canada /
http://www.slideshare.net/paulyoungcga/canada-retail-sales-
for-july-2016

19. WHAT CAN BE
DONE TO
SUPPORT RETAIL
SALES
Reduction of Tariffs
and Duties (USA vs
Canadian Pricing)
No increases to sales
taxes (Provincial or
GST)
Towing the line when
it comes to payroll
tax increases
Capping growth in
hydro rates
Reducing red tape
and regulations
Promote local buying

20. HOUSING MARKET
Issues: Housing prices on
average have been
growing at rate of 8%
for the past few
years. The 8% growth
rate is higher than
wage growth and
GDP growth
Housing prices are
not sustainable as
income growth has
stagnated
Foreign ownership of
property has increase
the speculation and
push up prices
Ridiculous bids and
asks for housing
No Integrated
strategy when it
comes to the housing
market (Provinces,
Municipalities,
Federal Government
and the Private
Sector
Source:
http://www.slideshare
.net/paulyoungcga/re
al-estate-trends-and-
analysis-for-canada-
august-2016

21. HOUSING MARKET
New Housing Price Index
Source: BMO Economics

22. GOVERNMENT SPENDING/DEFICITS
Issues:
Slow economic growth leads to pressure on government revenues
Today’s deficit and Debt are tomorrow hike in taxation or spending cut
Government needs to be transformed including more value for money as well as balance budget laws.

23. HOW DO GOVERNMENT DEFICITS AND
DEBT INFLUENCE ECONOMIC GROWTH
High government deficit may force
government into making cuts to
program spending.
Companies do not like to invest in
countries due to possibilities of taxes
will be increased
Raising taxes does not grow an
economy.
Https://www.youtube.com/watch?v=h
WarBMfshaA
Sources:
http://www.slideshare.net/paulyoungc
ga/what-does-government-deficits-
and-debt-mean-to-youppt

24. SUMMARY
The economic council is a good
idea as it brings new ideas to a
government . Will the government
implement their suggestions?
There is no easy solution to fixed
slow growth as there many pieces
of the puzzle
Adding more regulations will not
support economic growth – i.e.
C69 -
https://www.capp.ca/publications-
and-
statistics/publications/326232?ut
m_source=Facebook&utm_mediu
m=Social
Canada needs to become more
competitive -
https://www.slideshare.net/paulyo
ungcga/business-
competitiveness-canada
Government cannot do tax
increases and then expect
business can absorb those new
taxes. In the end the business will
pass those costs on to the
consumers -
http://www.slideshare.net/paulyou
ngcga/how-do-corporate-profits-
flow or
http://www.slideshare.net/paulyou
ngcga/what-is-carbon-tax-or-a-
price-for-carbon
Era of using Keynesian economics
to support economic growth are
done -
https://www.forbes.com/sites/pete
rferrara/2012/07/12/obamanomics
-the-final-nail-in-the-discredited-
keynesian-coffin/#53f9c93cba7d