In its last monetary policy report, the Bank of Canada said the economy was not cooling as quickly as expected because this mountain of money "may be acting as a buffer and supporting consumer spending." But as the Financial Post suggests in the story below, not all economists see it that way. Image from NBF Economy & Strategy
A mountain of money? Or a pile of pennies?
Much has been made of that vast trove of savings Canadians built up during the lockdowns of the pandemic, the Financial Post wrote this week.
In its last monetary policy report, the Bank of Canada said the economy was not cooling as quickly as expected because this mountain of money "may be acting as a buffer and supporting consumer spending," reported Pamela Heaven, with additional reporting from The Canadian Press and Bloomberg.
Oxford Economics believes most measures of excess savings from the pandemic "vastly overstate" the support they will give to consumer spending in months ahead.
Oxford economist Michael Davenport estimates households have just over $200 billion, or 7.3% of GDP, in extra savings, much smaller than common estimates in the range of $280 billion to $350 billion.
Furthermore, he thinks only $75 billion is liquid cash that will be spent.
Oxford says most measures don't consider that households were under-saving in the years leading up to the pandemic and fail to adjust for the amount already spent paying down debt, on international travel or investing in assets such as housing, stocks, bonds and crypto.
Others used the savings windfall to strengthen their retirement portfolios.
Barges booted from shallow Mackenzie River
The Marine Transportation Services (MTS) sailing schedule and transportation plans for the 2023 sailing season are being "adjusted" due to very low water levels on the Mackenzie River, the GNWT stated in a release this week.
Low water levels, particularly near the ramparts south of Fort Good Hope, could make certain sections of the Mackenzie River impassable for MTS tugs and barges sailing out of its main terminal in Hay River.
And as CBC North reported, instead of barging fuel and cargo down the Mackenzie River, MTS will ship cargo overland and up the Dempster Highway, before delivery to communities by barge — a 4,000-kilometre detour.
Meanwhile, fuel destined for northern communities will take an even longer route around Alaska.
And it just boggles the mind how the folks at MTS figure all this out. Examples?
- All cargo for Inuvik, Aklavik, Tuktoyaktuk, Paulatuk, Sachs Harbour, Ulukhaktok and Kugluktuk will be trucked to Inuvik and then barged from Inuvik to the five other communities.
- Fuel is being delivered by tanker to Tuktoyaktuk and then barged to Inuvik, Paulatuk, Sachs Harbour and Uluhaktok, as was done during the 2022 sailing season.
- It may be necessary to truck in and then barge or locally source a small amount of gasoline for Ulukhaktok, Sachs Harbour and Paulatuk.
- Cargo for Fort Good Hope will be trucked to Inuvik and then barged south to the community.
- Fuel for Fort Good Hope will be barged south from Tuktoyaktuk. This fuel will be added to the tanker delivery already planned.
Water levels at the ramparts section of the Mackenzie River south of Fort Good Hope are currently 2.7 metres. At two metres, the ramparts become impassable for MTS shallow draft vessels.
Now what was that about building a highway up the Mackenzie Valley? Sure would come in handy now.
What's the economic impact of having high immigration
The prospective ramp-up of immigration levels has sparked debate on whether the country can handle higher flows of newcomers amid a housing crisis, and what the total economic impact of having more people in the country would be, a Canadian Press story stated recently.
Proponents of higher immigration argue that the labour market is able to absorb more workers, and the country needs more working-age Canadians to support the tax base as more people retire.
“We need immigration at a relatively high rate, actually, in order to offset the economic impacts of aging — to be able to pay for the health care that Canadian seniors are going to need,” one expert said.
Wildfires hurt many industries, strain households
Canada’s wildfires have burned 20 million acres, with smoke levels raising concerns on both sides of the border.
The toll on the Canadian economy is only beginning to sink in, according to a bulletin from Isure insurance in Ontario.
In addition, the fires are imposing uncounted costs on the national health system. Canadian businesses are being affected by wildfires, so what does this mean for the economy?
Timber analyst John Duncanson of Corton Capital states: “The Canadian lumber industry is already suffering from a supply issue. Timber has been impacted by disease and manmade policies that already put pressure on available supply. These wildfires will only make this worse.”
Canada’s worst-ever spring wildfire season is forcing its forestry industry to shutter sawmills, thereby driving up lumber prices and setting production back for months. As a result, housing construction is beginning to slow due to higher costs and a tight labour market.
The Canadian tourism industry is also being hit in some regions, with disruptions being felt sometimes far from the fires … including with delays or disruptions with flights originating in other parts of Canada or the United States.
The Canadian insurance industry is bracing for what is to come, observing the increasing damage in recent years with alarm. After several crippling payouts, it is translating to increasing prices for homeowners and businesses.
POLLING THE CHAMBER:
The community evacuations at Hay River, K’atlodeeche First Nation, and now Behchokǫ̀, to name a few.
The long lines of semi trailers at the wildfire closures at Behchokǫ̀ of Highway 3 — the lifeblood of Yellowknife’s economy.
The choking and arid smoke forcing the cancelation of outdoor recreation events and imperilling the health of the infirm.
If this is climate change’s ‘new normal’ then it’s obvious the GNWT needs significantly more wildfire fighting resources, given the tragic loss of life, destruction of property, and disruption to the economy we have seen this summer.
|Should the GNWT have a hard look this fall and winter at how public funds are allocated? |
Preparations are going on behind the scenes for the return of the NWT Chamber's annual golf tourney. FORE! The Chamber is Friday, Aug. 18, at the Yellowknife Golf Club with shotgun start at 1pm. Sponsors are stepping up to show their support for the NWT Chamber, celebrating its 50th Anniversary!
There are a limited number of individual golfer spots still available, the final number dependent on the number of sponsorship packages that include foursomes, are sold. Supporters of the Chamber who don't golf or can't make it that day can sponsor a hole and be represented by prominent signage at a hole.
The easiest way to register and make payment is to visit the event page.
Thanking you in advance for your consideration and support of this key fundraiser.
And this year, a donation from the proceeds will be made to Skills Canada NWT, in what could be the genesis of annual support for this deserving organization.
It's mission is to engage youth, with the hope to increase awareness of their educational choices and inspire them to consider careers in the skilled trades and/or technology sector.
As with the NWT Chamber, Skills Canada NWT is working to expand its programming and reach throughout the Northwest Territories.
"We’re doing the best we can. It’s time to support the North, and if the federal government isn’t listening then I need the people."
— NWT Premier Caroline Cochrane told Cabin Radio as she visited evacuees from Behchokǫ̀ this week outside the Yellowknife Multiplex. She continued:
"Although I’m not comfortable with it, I’ve been focusing on trying to get as much national attention to the North as possible, so that people start talking about the North.
“I’ve been pushing my way in there, as much as possible, to try to get people to recognize. And it’s working. I’ve been getting calls from the Globe and Mail, I’ve been getting calls from Power and Politics.”