TD Provincial Economic Forecast: Rising Tide Lifts All Boats

This provincial outlook incorporates widespread upgrades to 2021 growth forecasts relative to the March view. Upward adjustments range from 0.2 ppts in Newfoundland and Labrador and New Brunswick to 0.6 ppts in Quebec. The improved outlook is despite a third wave that has imparted more economic damage than endured during the second wave. Ontario and Nova Scotia seem to have suffered more damage, leaving employment in these provinces furthest from pre-pandemic levels as of May. In contrast, employment is much closer to pre-pandemic levels in B.C., New Brunswick and the Prairies.

With first dose vaccination campaigns progressing rapidly, we expect economies to rebound with gusto beginning this summer.  All provinces have released re-opening plans. Most of these plans have begun in late-May/early-June, with further easing expected in July. Ontario stands out for its go-slow approach. However, the Province recently pushed forward its Stage 1 beginning date, suggesting the potential for further changes down the road. 

Western Canada and to a lesser extent, Atlantic Canada, are well positioned to reap the benefits of a synchronized upswing in commodity prices. A swifter than expected rebound in energy demand and prices is supportive for incomes, exports, and government coffers. A repeat of last year’s strong performance for crop production may prove to be a difficult feat, but solid demand and prices should keep the sector on a solid footing. An unprecedented bull market in lumber is an added tailwind to B.C.’s already-robust economic recovery.   

A long-awaited government budget season culminated with another round of upward revisions to long-term provincial spending profiles. Relative to our previous forecast, B.C. and Quebec appear poised to benefit the most from new spending initiatives. All Provinces have also avoided any abrupt tightening of their purse strings. This came at the cost of upgraded medium-term deficit estimates across most provinces.

At long last, Canadian home sales have begun to unwind from the stratospheric levels observed earlier in the pandemic. With tighter stress test rules taking hold in June, further declines are in store. However, tight supply/demand balances across Canada should keep home prices elevated, notwithstanding the potential for some near-term, policy-related cooling. 

https://economics.td.com/provincial-economic-forecast

From buying a house to retiring — planning for life’s milestones

(NC) As we emerge from the pandemic, many of us are planning on how to get our lives back on track to achieve our goals in life, whether it’s buying a house, setting aside money for our kids’ education or retiring comfortably.

Whatever stage you’re at in life, proper planning can help you successfully navigate life’s milestones. Get the ball rolling by following these helpful tips and tricks:

Your first home

While about 68 per cent of Canadians are homeowners, real estate prices been running hot in the country’s major markets for the last couple of years, making it more difficult for first-time buyers to find a home.

So before you start shopping for real estate, it’s a good idea to take a step back and carefully plan your purchase. The first step when saving for a down payment is to get your finances in order and seriously think about what you can afford.

While saving for a down payment should be your priority, also put aside some money to cover closing costs. Make sure you look into first-time homebuyer incentives, as these opportunities may make purchasing a house more affordable than you think.

Your kids’ education

Hundreds of thousands of young people are about to head off fresh-faced to post-secondary institutions this fall, armed with dorm room posters, stacks of textbooks and… a realistic budget? If the student in your life doesn’t have one, it’s not too late to plan.

Include all the costs of student life when making a budget; you can find a template online. Think about tuition fees, student fees, health insurance, books and other course materials, and living expenses, then try to make room for some fun in there too.

Your retirement

If your retirement plans got derailed by the pandemic or you’ve had to dip into your savings, there’s still at least one source of income you can count on. The Canada Pension Plan is the foundation for your overall strategy, which could also include a workplace-related pension, personal savings and investments.

Independent studies have confirmed that the CPP will be there when you retire, even for those just heading off to university or entering the workforce straight out of high school. In fact, CPP Investments, the professional investment management organization that manages the fund, recently reported a record return of 20.4 per cent for its 2021 fiscal year, growing the fund by more than $87 billion to a total of $497.2 billion.

www.newscanada.com

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