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Hello reader! This padlet wall is meant to review and briefly analyze the effects of the recent market distributions, and how they have affected the Canadian GDP. It will mainly focus on analyzing the economic losses experienced during the Covid-19 pandemic, as well as the recent military conflict in Europe and its effects on Canada as it is recovering from the Covid-19 Pandemic. Hope you enjoy the read!

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This picture gives a visual demonstartion on the effects of the Covdi-19 pandemic on the canadian GDP. Surprisingly, not all provinices were in a decrease, as Yukon and Nunavut actually rose in GDP. This was most likely caused by the large population of the provinces, allowing most businesses to operate. The severe decline in Alberta's and North western Territory's will be elaborated in Article 1. Overall, the impact of the pandemic had severely decreased the national GDP, by approximately 5.3% in 2020

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This picture shows a more detailed breakdown of how the Covi19 pandemic has effected the Canadian GDP in the first months. Initially, the decline is seen as 2%, as not all business restrictions were in place, and the public was not fully aware of the consequences of the virus. As the rest of the restrictions came into effect, the GDP saw a massive decline of approximately 12%, as not only did all the restrictions became active, but as a consequence, economy stimulation and household spending reached a severe and sudden contraction. As such, the effect on the GDP was detrimental and took for the government to stimulate the economy via grants such as CERB for it to rebound (seen from July through Q4 of 2020)

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Article 1: Alberta's GDP plummeted most of all provinces in 2020, while N.W.T. hit hardest in country

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Article 1: Alberta's GDP plummeted most of all provinces in 2020, while N.W.T. hit hardest in country

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This article details the reasons for the foreseen decline in the province of Alberta (-8.2%) and touches up on the decrease in N.W.T (-10.4%) . Alberta has seen this major decline, as gas prices have reached record low prices, as demand has plummeted due to travel and business restrictions. In fact, gas prices have actually reached a negative value per barrel, resulting in suppliers experiencing massive losses.  In particular, support activities associated with the oil sector dropped 40.8% during the initial period of the pandemic. As Alberta's main source of their provincial GDP is oil and energy, combined with all other factors resulted in their significant loss.

The main source of economic growth for N.W.T. is their 2 diamond mines, which due to travel restrictions on non-essential goods had a severe effect on the demand for the diamonds provided by the province. Due to their smaller economy, the effect of this lack of demand resulted in a larger decrease in GDP as compared to Alberta.

https://www.cbc.ca/news/canada/calgary/canada-alberta-nwt-economy-gdp-decline-2020-1.6011902

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Article 3: Canadians cutting back spending on groceries, restaurants as inflation rises: poll

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Article 3: Canadians cutting back spending on groceries, restaurants as inflation rises: poll

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This article further elaborates on the previously mentioned decreasing commodity spending, particularly in the food and restaurant sector. Consumers in Canada see the rising inflation rates as a major concern having the resulting effect on lowering demand for certain goods. This combined with the inflation rates as well as the rising costs of certain goods due to the Ukraine conflict, can have a positive feedback loop on the decreasing GDP, resulting in decreasing GDP rates in all aspects.

The article particularly points out how people are spending less on restaurants as well, resulting in even less stimulation of the economy and can result in more business failing.

In conclusion, the current 5.1% inflation rate is accelerating along with the the GDP remaining at risk of declining as well.

https://www.ctvnews.ca/canada/canadians-cutting-back-spending-on-groceries-restaurants-as-inflation-rises-poll-1.5824545

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Canadians cutting back spending on groceries, restaurants as inflation rises: poll

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A new poll suggests Canadians are looking for ways to cut back on spending as their concerns about the cost of living rise alongside headline inflation rates.

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Article 2: Economic Impact on Canada of the War in Ukraine

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Article 2: Economic Impact on Canada of the War in Ukraine

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This article discusses the recent market disruptions and their effect on the Canadian economy, caused by the Ukraine conflict. First, the article points out the sanctions placed upon Russia, which is the major trading partner of the West. This includes Canada, thus this can have a severe effect on the economy in the coming months. Additionally, Ukraine is a major supplier of agricultural goods (along with Russia and Belarus). This in turn can have a great effect on consumer spending as well as a negative effect on the food industry around the globe. This, has resulted in an inflation rate spike of 1.2% this year, and 0.9% to the 2023 rate. As the state of the economy is currently not ideal for the average Canadian, this can have a negative effect on business as well as economy stimulation as a whole, which can continue the recession we have been experiencing since 2020.

Later in the article, a graph is shown how each sector has been expected to perform due to this, and the most immediate sector affected  was the information and cultural services sector, with an estimated 0.2% this year so far.

https://www.conferenceboard.ca/insights/featured/canadian-economics/economic-impact-on-canada-of-the-war-in-ukraine

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Commentary

The Conference Board of Canada's Chief Economist Pedro Antunes offers the following insights on the economic impact of the Russian government's decision to invade Ukraine on Canada:

Vladimir Putin's war is a tragedy that has resulted in thousands of innocent civilian lives lost and millions displaced. Ukrainians and Russians are being killed in battle, and Ukraine's cities and infrastructure are being turned to rubble. The economic fallout for both countries is devastating, and the effects will be felt globally.

Assumptions and insights from our analysis using The Conference Board of Canada's National Forecasting Model

Massive Commodity Price Shock

With very few exceptions, the global community has applied massive economic and financial sanctions on Russia. Russia's banking sector is unable to operate internationally, the stock market is closed, foreign funded investment projects are halted, many foreign affiliates operating in the country are stopping their business activity and even the central bank is unable to access its foreign reserves. In addition to an economic collapse within Russia, the situation is causing a curtailment, if not altogether halt, to Russian exports.

Russia is a globally important exporter of a wide range of products and commodities. It is a major exporter of energy, in the form of natural gas, crude oil, coal and refined petroleum. Together, Russia and Ukraine are major exporters of wheat, corn, oilseed, potash, aluminum, copper, nickel, and neon. Overall, a very similar basket of products that Canada produces and exports.

Sanctions Will Persist

Curtailed exports from Russia and Ukraine have resulted in a massive and sudden global commodity price shock that tops anything we've seen in recent decades. Following on the heels of a 52.6 per cent annual increase last year, the Bank of Canada's Canadian basket of raw material prices is up another 48 per cent above the 2021 average price in the third week of March. These increases outpace the commodity price boom of 2007-08. (See Chart 1).

Chart 1

Commodity Prices Spike

(Bank of Canada commodity price index, to March 9, 2022, 1972M1 = 100)
(The Conference Board of Canada, estimate for month of March 2022)

Source: https://www.bankofcanada.ca/rates/price-indexes/bcpi/

It is impossible to know how the situation in Ukraine will unfold but unless Putin is overthrown, the sanctions are expected to persist. For this analysis, we thus assume that Russia's trade and exports will continue to be hampered through this year and next, and that commodity prices remain elevated, though ease from current levels. WTI oil prices, for instance, are assumed to peak at US$110 in the second quarter, but then ease to average roughly $US85 a barrel next year.

Inflation Ratchets Up, Households cut Back

The boost to energy, food, metal and mineral prices adds to already hot global and Canadian inflation. We estimate that 1.2 percentage points will be added to inflation in Canada this year and 0.9 percentage points added in 2023, in comparison to a counterfactual scenario that assumes no war took place. The higher rate of inflation reduces household purchasing power but also pressures the Bank of Canada to increase rates more quickly-just 0.3 percentage points in 2022, but next year, the Bank Rate would be up 0.7 percentage points. The combination of higher inflation and higher rates results in a negative hit to real consumer spending in both years, down 0.3 per cent in 2022, and down 0.7 per cent in 2023.

Exceptional Boost to Export Values

While households struggle with inflation, the rapid ramp up in raw material prices benefits Canadian food and raw material producers and exporters, providing a massive increase in revenues and profits. Canada's terms of trade (the ratio of export prices to import prices) improves by 3.5 per cent in 2022-adding nearly $77 billion (2.9 per cent) to nominal GDP in 2022 and $46 billion to corporate profits.

Increased profits will incent mining and agricultural production, but the gains are limited by capacity. In addition, higher profits will prompt more capital investment and provide a strong boost to construction activity. The effects of the war will boost goods production while dampening demand for wholesale, retail and many other private services, especially next year as inflation and higher rates eat away at household spending. Manufacturing is also negatively affected, mostly in 2023 as the war impacts demand from our trade partners. Overall, real GDP is up by 0.2 per cent in 2022, but down by 0.1 per cent in 2023. (See Chart 2.)

Chart 2

Goods Production Up, but Most Services Hit Down

(impacts by industry, real GDP, per cent change)

-0.6-0.8 2022 2023-0.4-0.2 0 0.2 0.4 0.6 0.8 1.0 Public sector Other business services Professional, scientific and technical Finance, insurance and real estate Information and cultural services Transportation and warehousing Wholesale and retail trade Manufacturing Construction Utilities Mining Agriculture, forestry and fishing Total GDP

Source: The Conference Board of Canada

Governments Expected to Spend Some of the Windfall

The Federal and aggregate provincial/territorial governments will benefit from a significant rise to nominal revenues associated with the largesse of the increase in nominal GDP. We estimate that roughly $10 billion is added annually to revenues for both these levels of government. However, rising wage pressures and other costs will also put pressure on spending. As such, we assume that both levels of government will also bolster nominal spending such that their balances only improve by a modest amount by 2023-the federal deficit is reduced by $2.9 billion, while the provinces and territories see a $1.1 billion improvement in their aggregate deficit. This assumption helps bolster real public sector activity and keeps overall employment from declining. Canada-wide employment is essentially unchanged in 2023 when comparing the war and counterfactual scenarios.

Additional info:
This analysis was produced using The Conference Board of Canada's macro-econometric model of the Canadian economy. The model includes 1,700 variables covering the National Income and Expenditure Accounts, as well as detailed indicators related to population, labour, productivity, wages, prices, investment, financial markets, capital flows, and government finance.

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Economic Impact on Canada of the War in Ukraine

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Commentary The Conference Board of Canada's Chief Economist Pedro Antunes offers the following insights on the economic impact of the Russian government's decision to invade Ukraine on Canada: Vladimir Putin's war is a tragedy that has resulted in thousands of innocent civilian lives lost and millions displaced.

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Article 4 Canada’s Q4 GDP beats estimates, showing Omicron resilience

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Article 4 Canada’s Q4 GDP beats estimates, showing Omicron resilience

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https://globalnews.ca/news/8651965/canadas-gdp-omicron-growth/=

This article focuses on how the Canadian economy is finally beginning to recover from the Covid-19 pandemic and the more recent Omicron variant. In 2021, the GDP has grown approximately 4.6%, a stark contrast from the 5.3% decline of 2020. In addition the Canadian GDP has grown 0.2% in January, showing people may be more motivated to spend than previously expected. This is despite the Omicron Variant being present in January, which surprised economists and analysts. Most likely cause of this was due to consumer restlessness, and eagerness to improve their quality of life by spending more on recreational activities and other positive incentives. It is safe to say the Canadian economy is very unpredictable, with a good chance of improvements in the coming months.

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Statistics Canada said Tuesday the economy grew 4.6 per cent last year, compared with a decline of 5.2 per cent in 2020, the first year of the COVID-19 pandemic.

GDP growth in the fourth quarter came in at an annualized rate of 6.7 per cent.

Statistics Canada said the largest contributor to economic growth last year was household spending and residential construction as new home construction, resales and renovations increased at near-record levels.

The increase of 15.4 per cent for the year was second only to the 17.4 per cent gain recorded in 1983 as the country came out of a recession the previous year.

Household mortgage debt increased by an unprecedented $182.4 billion last year, Statistics Canada said, bringing the total amount of residential mortgages countrywide to $1.93 trillion in December.

Output was flat at the end of 2021 as Statistics Canada said real gross domestic product was essentially unchanged in December. That left the Canadian economy 0.4 per cent above pre-pandemic levels recorded in February 2020.

The agency also said in an early estimate that the Canadian economy grew by 0.2 per cent in January.

The January figure came as a bit of surprise for economists who expected a pullback in the month amid the Omicron wave that led to a loss of 200,000 jobs in the month.

"The fact that Statistics Canada is suggesting that the economy managed to grind ahead in that month to me is a very pleasant positive surprise given that big parts of the economy saw restrictions kick in at the start of the year; mostly Ontario and Quebec but other areas as well," said BMO chief economist Doug Porter.

Royce Mendes, managing director and head of macro strategy at Desjardins, said the economy likely built on that momentum in February as the country turned a corner on the latest wave of the pandemic, which allowed for businesses to reopen across the country.

The figures come a day before the Bank of Canada's next scheduled interest rate announcement. The central bank is widely expected to raise its key policy rate on Wednesday in the first of what is expected to be several hikes higher this year.

They also landed the same day as parliamentary budget officer Yves Giroux released his updated outlook on the Canadian economy and federal finances.

Giroux's report released Tuesday said the economy, after a weak start to 2022, should grow 3.9 per cent this year, driven by a sharp rebound starting in the second quarter.

He also foresees a budget deficit this fiscal year of $139.8 billion, and $47.9 billion in the next fiscal year which starts in April - both figures being better than the government projected in its financial update in December.

But Giroux warns that rosier financial picture for federal books, aided by a better-than-expected economy, could easily sour.

Giroux said outstanding Liberal election promises amount to $48.5 billion in new spending. If much of that shows up in this year's budget, Giroux says debt and deficits would rise.

- with files from Reuters

Russia-Ukraine conflict: Sanctions pummel Russian economy

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Canada's Q4 GDP beats estimates, showing Omicron resilience - National | Globalnews.ca

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Statistics Canada said Tuesday the economy grew 4.6 per cent last year, compared with a decline of 5.2 per cent in 2020, the first year of the COVID-19 pandemic. GDP growth in the fourth quarter came in at an annualized rate of 6.7 per cent.

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Video 1: How was Canada's economy performing prior to the COVID recession?

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Video 1: How was Canada's economy performing prior to the COVID recession?

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https://www.youtube.com/watch?v=rCvpIRhrZM4

This video discusses how the economy performed prior to the Covid-19 recession. The data presented shows a downward trend since the year 200 in Real GDP/capita, private sector growth and the average change in business investment. What this article fails to acknowledge is the rise of alternate investment strategies such as cryptocurrencies and NFTs, which account for a significant unaccounted growth in Real GDP/capita. In addition, the video does not reflect private sales, which since the year 2015 have risen due to the availability of marketplaces such as Kijiji and Facebook Marketplace. Needless to say, the trend is worrying, however it does not reflect the full picture.

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How was Canada's economy performing prior to the COVID recession?

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Video 2: Canada can deliver 4.2% GDP growth this year, a very strong number: Chief economist

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Video 2: Canada can deliver 4.2% GDP growth this year, a very strong number: Chief economist

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https://www.bnnbloomberg.ca/video/canada-can-deliver-4-2-gdp-growth-this-year-a-very-strong-number-chief-economist~2400865

This video discusses the surprising rise in GDP seen in 2021. The main source discussed was the massive job growth, as the unemployment rate has drastically decreased in the last year, given the easing restrictions. Many individuals who were laid off managed to find other work or return to their place of employment, reflecting positively on the GDP. As a result, the GDP of 2022 is expected to rise another 4.2% this year. This is despite the Ukraine conflict, as the video discusses how the Canadian economy is surprisingly not that dependent on those regions for exports, and can in fact benefit as Canada produces large quantities of components for fertilizer, which are mainly produced by the recently sanctioned Belarus and Russia.
The video also discusses the rising household debt, which may be a concern in the future.

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Canada can deliver 4.2% GDP growth this year, a very strong number: Chief economist

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Simona Mocuta, chief economist at State Street Global Advisors, joins BNN Bloomberg and discusses even though inflation is high in Canada consumers can handle it if they have jobs. She adds the attack on Ukraine is especially affecting growth prospects in Europe, but Canada has not been downgraded.

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Video 3:  Here's how war in Ukraine could impact Canada's economy

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Video 3:  Here's how war in Ukraine could impact Canada's economy

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https://www.youtube.com/watch?v=H9aO-dDl4Dg

This video discusses the potential effects of the Ukraine conflict on Canadians, particularly from Saskatchewan's point of view. The main causes discussed are the main consequences of the  fore mentioned sanctions placed on Russia. The main concern lies in the food sector, as many agricultural goods come from the sanctioned country, and their allies (Belarus). Mainly the supply of wheat will have the largest and most immediate affect on the lives of Canadians, as it is a crucial ingredient of many major household meals and kitchen products.
On the other hand, the sanctions could have a somewhat positive benefit on the Canadian economy, as Saskatchewan is one of the top suppliers of a major product involved in the production of fertilizer, which could potentially have a higher demand and could potential stimulate our economy further by new job creation in the sector.

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Here's how war in Ukraine could impact Canada's economy

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Video 4: What the pandemic public spending spree will mean for Canada’s post-COVID economy?

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Video 4: What the pandemic public spending spree will mean for Canada’s post-COVID economy?

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https://www.youtube.com/watch?v=pm_rV_JneI8

This video covers one of the main consequences of the Covid-19 pandemic, which is the overall rise in household debt. It covers both the potential benefits, as well as some more severe and immediate negatives. As the GDP has been stagnating, the economy is in the right position to be stimulated by more spending. People taking out more loans could is actually a predictable response, especially since many individuals have not seen an increase in wage along with the fore mentioned inflation rise. Moreover, the unemployment rate drop can indicate that many people will be able to pay off said debt, having a sustainable rise in the nations GDP.

This rise in debt has an obvious other side however. The main challenges are seen by younger individuals in provinces such as Alberta, where the main industry (oil) has actually not been producing the jobs in the sector, leaving many potential and qualified employees jobless, or settling for a job they are underqualified for. This can actually be seen as a sign of fearful consequences to come, and is proof that the challenge faced is not always reflected in statistics.