World Economy

Canada Says Growth Accelerating Sharply

Household consumption has been the main contributor to growth over past year.Household consumption has been the main contributor to growth over past year.

The federal government has released its fall economic statement and the news is positive: Canadian economic growth has accelerated sharply, growth is becoming more balanced across sectors and regions, net debt to GDP continues to decline and because of growing consumer confidence, local economies are thriving.

Recent statistics from the Central Okanagan Economic Development Commission indicate household income has risen, labor force participation and housing starts are up, unemployment is low, more business licenses have been approved, and record breaking numbers in passenger traffic at Kelowna International Airport continue to bring visitors to the Okanagan, AAP reported.

Even the Parliamentary Budget Officer’s latest financial report confirms that “current fiscal policy in Canada is sustainable over the long term” and relative to the size of the economy, “total government net debt is projected to remain below its current level over the long term.”

As the economic statement noted, household consumption has been the main contributor to economic growth over the past year, underpinned by solid employment gains, low interest rates, improving consumer confidence and, since July 2016, the support of the Canada Child Benefit to families.

In fact, Bank of Canada Gov. Stephen Poloz credited the Liberal government’s Canada Child Benefit program as a reason for the country’s strengthening economy, calling it “highly stimulative”.

The government has responded with a set of modified tax proposals that will ensure small business owners are respected. The government is fulfilling its commitment to lower the tax on small business, from 11% in 2015 to 9% by 2019.

In addition, the government has also announced it will not be moving forward with proposals to limit the multiplication of the Lifetime Capital Gains Exemption, which was of concern to many farmers and families who were planning on handing down their business to the next generation.

Finally, the government made amendments to its consideration of passive investment to provide business owners the flexibility afforded from savings accumulated in the corporation, while ensuring these measures are provided in a manner that do not encourage wealthy individuals to have unlimited tax-assisted savings over and above the Registered Retirement Savings Plans and the Tax-Free Savings Account limits available to everyone else.

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