The document discusses Canada's economic outlook for 2017, focusing on key areas like employment, exports, government spending, and business investment. It notes that while government spending can support the economy, overspending risks future tax increases or spending cuts. Job growth is skewed toward part-time roles, while business investment and exports face challenges like infrastructure gaps and lack of trade agreements. Risks to the economic outlook include high household debt, new carbon taxes, and uncertainty around US policy changes.

1. 2017 Outlook – Canada –
Economy and
Government Spending
BY: PAUL YOUNG, CPA, CGA
DATE: DECEMBER 18, 2016

2. Description
• This presentation will look at the 2017 economy forCanada. It will
focus on key areas like exports, government spending, domestic
spending, wages, employment, infrastructure as well as other areas
of policies.

3. Agenda
• Key Indicators / Canada
• Employment
• Exports / Imports
• Real Estate/Housing
• Retail Sales
• Government spending
• Business Investment

4. Key Economic Indicators
Source – National Bank of Canada

5. Job Market / 2017
• WindTurbineTechnician – Annual Salary - $57,931
• Occupational therapy assistants - Annual Salary - $52,381
• Physical therapy assistants - Annual Salary - $41,398.50
• Home health aides - Annual Salary - $41,067
• Nurse anesthetists, nurse practitioners, and nurse
midwives – Annual Salary - $73,391 to 87,100
• Physical therapists - Annual Salary - $93,542
• Statistician - Annual Salary - $63,291
• Operations research analyst - Annual Salary - $49,998
• Personal finance advisors - Annual Salary - $47,041
Source - http://www.cheatsheet.com/money-career/10-jobs-hiring-like-crazy-
2017.html/?a=viewall
Student Debt $25,o00
Source – National Post
Annual Salaries
• The average earnings are
about $40K - Source –
Stats Canada
- # of Graduates is about
500K/year
- Employment market is
creating about 200K new
jobs per year – FYI – bulk of
new jobs are part-time
- Source – Stats Canada
Millennials

6. Job Market / November 2016
• Family income for house today is $100K+
“The country added a net total
of 11,000 jobs in the month, but
all of the gain was in part-time
work. Full-time employment fell
by 8,700 positions, while part-
time jobs grew by 19,400.
In fact, over the past year,
Canada has lost 30,500 full-time
jobs, while gaining 213,700 part-
time jobs.That likely helps to
explain why wages in Canada
are falling, when adjusted for
inflation.”
Source -
http://www.huffingtonpost.ca/201
6/12/02/unemployment-canada-
november-2016_n_13369418.html

7. Income and Housing Mortgages
• Average weekly
earnings of non-farm
payroll employees were
$957 in September,
virtually unchanged
from the previous
month (-0.1%) and
up 0.4%
from 12 months earlier.
Average house
Price $481,991
(October 2016)
Average Income
$50K (September
2016)
• A key mortgage rate is on the way
up again at Toronto-Dominion
Bank.
• The bank said its five-year closed
mortgage special rate will increase
by 10 basis points to 2.94 per cent,
effective Thursday, matching a hike
last month by RBC. Source –
CBC.com
After tax income
per month would
be $2,500
Two income: 100K or
5,000/month (after tax income
Ratio: 38% of your after tax
income would cover the mortgage
Source – CBC, CTV, CMHC, Stats Canada and mortgage calculator

8. Exports / Imports
Source – Stats Canada and National Bank of Canada
Analysis/Commentary
• Slow GDP growth around
theWorld
• Key markets likeVietnam,
Malaysia, India, Indonesia
andThailand lack FIPA and
Trade Agreements
• United States red
tape/regulation and taxation
reforms will support growth
in the United States
• Canada lacks the
infrastructure to expand
exports (oil, gas, grains, etc.
• For each $1B in exports
there is 5,500 new jobs
• Canada is export driven
economy due to its
population size

9. Retail Sales / Canada
Source – Stats Canada, Global News and National Bank of Canada
Analysis/Commentary
• Wages are not keeping pace
with inflation
• New carbon taxation for
Ontario and Alberta will cost
household family about
$2,500/year
• Household debt continues to
climb
• Online ordering will to be the
growth area for retailers

10. Government spending
Source – Fraser Institute and RBC
Analysis and Commentary
• Keynesian economics has been used
by governments over the years with
limited success.
• There are right investment, i.e.
infrastructure and tax cuts
• 40% of government spending tends to
get wasted
• It is not one policy that supports
economic growth, but a combination
of policies.
• Today’s debt and deficits are
tomorrows to tax increase and/or
spending cuts.
• All levels of government need to focus
on value for money when it comes to
delivery program spending.
• Increasing taxation does not lead to
economic growth -
https://www.youtube.com/watch?v=h
WarBMfshaA&t=29s

11. Business Investment
Analysis / Commentary
• Businesses need to invest more in
R&D/Innovation.
• Government needs to review the
CCA deduction for Manufacturing
and processing equipment
• Key investment in infrastructure,
i.e. roads, bridges, pipelines,
ports, rail lines, etc. is required.

12. Summary - Risk Factors
• Government spending will not on its own increase economic growth
• New taxation like carbon taxation could impact household budgets. Consumer consumption is a key driver for the economy in
Canada
• Access to Canadian goods and services needs to improve through more FIPA andTrade Deals.TPP is at risk due to change in
government in the United States
• Housing market reforms could influence housing market in Canada.There are greater risk to the housing market due to issues,
like bids and ask, slow wage growth, red tape, construction costs and commute times. Many areas need to be fixed to stabilized
the real estate market
• Job market is producing too many part-time jobs. Part-time jobs do not produce the economy benefits that would support
consumer spending.
• Business investment needs to improve. Many businesses are reluctant to spend on areas like capital equipment, innovation and
headcount due to sluggish market conditions.
• Growing household debt in Canada could impact overall consumer consumptions. Many economic reports mentioned consumers
will help the economy.The problem is that household budgets are under pressure due to taxation/hydro costs/users fees by all
levels of government
• United States government taxation and red tape reform could change the competitive environment in NorthAmerica. Canada is
still interconnected with United States as such changes to government policies could have impact on where business investment
is done by Canadian Corporations.
• Middle class is under pressure in Canada, but also around the world. Canada has help the middle class due to its taxation cuts as
well as income redistribution of wealth in the past. However, very few governments in Canada are either running surpluses or
balance budgets.The debt and deficits could impact the delivery of program spending in Canada.