In a Globe and Mail
report published by BNN
, BoC Governor Stephen Poloz said that this slump could be largely attributed to the economic output affected by the unprecedented Fort McMurray blaze, which is expected to knock 1 to 1.25 per cent off the GDP in Q2 2016, thus leading lead to a “very choppy” economy this summer.
Fortunately, a combination of stronger exports and better trade prospects with an improving U.S. economy would allow Canada to make up for the lost output between July and September.
Poloz assured that these signs of recovery would be here to stay, despite the road bumps from Fort McMurray and the continuous decline in energy and resource investment. By the end of this year, energy sector investment is projected to be at least 60 per cent below 2014 numbers.
“Many firms are close to their capacity limits, which augurs well for future investment and new job creation,” the Governor said. “So while the whole process has been disappointingly slow and uneven, we remain confident that we have the right narrative.”
Poloz pointed pharmaceuticals, furniture and fixtures, and building materials as the strongest performing export segments, having recovered to their pre-crisis levels. Tourism also continues to be a boom sector, and the real estate bubble does not seem to be popping any time soon.
“The process has been uneven, and probably will remain so, but we are making real progress,” he stated.
Positive economic outlook for B.C., Ontario up to the end of 2017
Housing markets to remain healthy despite shrinking economy – TD
The Canadian economy is expected to remain flat or even shrink in the second quarter of the year and will only show signs of “outsized recovery” by Q3, the Bank of Canada recently said.