25 October 2019

Although politically we can see much done about deficit spending, CIBC World Markets Deputy Chief Economist Benjamin Tal says Trudeau’s election promises will amount for about $4 billion in spending, which is almost 0.2% of GDP. “It’s not enough to change the BoC’s mind sharply”, – he added.

As we can see, Canada’s economy has been successfully avoiding the impact from the trade war between the U.S. and China. However, Canadian open economy will not be bulletproof forever.

According to BMO Capital Markets, due to Canada’s strong job growth and the normalizing real estate market (with the desired near 2% inflation) Poloz will probably stay at a no-change path in 2020.

“We were already expecting no rate movements from the central bank next year, and the election result only strengthened our opinion”, – noted BMO Chief Economist Doug Porter.

Meanwhile, Porter pointed to a long period without economic forecast updates.

“His opinion could have changed, and we’ll see that next week”.