Our growth will be far lower than in the United States.
Policies have consequences.
If one country cuts taxes, reduces regulations, and encourages the development of natural resources, it will start to grow faster.
If another country increases taxes, fails to develop resources, and imposes onerous regulations on businesses, then growth will slow.
And that’s exactly what’s happening.
The IMF has downgraded their projections for Canada’s economic growth in 2018 and 2019 from the already low level of 2.3%, to 2.1% this year, and 2.0% in 2019.
Meanwhile, economic growth in the United States is projected to hit 3.0% this year.
Keep in mind, that 1% gap in growth is a big difference.
2.0% growth is almost nothing, when we consider the yearly increase in our population is about 1.2%.
Even more concerning is the fact that these projections are being made before we see the full impact of the Trans Mountain crisis. With investment in Canada already collapsing, the Trans Mountain issue – and the weakness of the Trudeau government – is destroying confidence in Canada as a place to invest.
That loss in investment will make our economy even weaker, which is a huge problem considering the immense burden of debt faced by consumers and governments alike. While an economy can sustain debt when there is confidence in the future, when that confidence erodes that debt becomes a much larger vulnerability, which can quickly cascade into a recession or a crisis.
As a result, Canada is increasingly vulnerable, as our neighbours to the south outpace us in competitiveness and investment and faith in our economy erodes.