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Economy

“When you find yourself in a hole, stop digging”
— Will Rogers

Canada’s economy grew 0.7% in January

The Canadian Press published an article on 31 March 2021 that Canada’s economy grew 0.7% in January and that construction, manufacturing ad real estate contributed to the growth.

Read the full article here: Canada’s Economy

 

Current Canadian Economic Standing

Canada exports large quantities of commodities including iron ore, copper, metallurgical coal, oil, nickel, natural gas, and potash. Other products include pulp and paper. Sadly the world prices for these commodities are very weak at present.

The metallurgical coal and iron ore prices have been falling for many months as steel production has been limited in the East, especially China.

The mining company Anglo American announced in the media in 2015 that it will terminate 85 000 of its 135 000 employees world wide (about 60 % of it’s employees).

Teck Coal in British Columbia (one of the world largest producers of metallurgical coal) announced that they are going to lay off another 1000 people. Several South Africans had job offers there, but the offers were rescinded.

Another metallurgical coal mine in Alberta announced that they will freeze underground operation until the metallurgical coal price is higher.

In Manitoba the large nickel company, Vale, announced that they will stop refining nickel in 2018 at the Thompson location. The nickel price is now the lowest since 2008.

It was announced yesterday that a potash mine of $3.5 billion in Saskatchewan was placed on hold by a mining company, Vale, due to low potash prices. Potash is used in the fertilizer industry.

One of our employers in Saskatchewan (in the instrumentation and electrical field) just closed their branch due to low oil prices. The same employer informed me yesterday that hundreds are unemployed in North Eastern British Columbia, and that when they place advertisements in the trades they receive many applications.

World copper prices are now at USD$2 per pound, down from USD$4.60 during 2011. USD$2 per pound is close to the price of copper during the 2009 world recession. Annually, 20 million tons of copper is produced worldwide. It is expected that there will be a surplus of 500 000 tons of copper in 2016.

Spot iron ore prices are expected to fall to $44 a ton next year and $40 a ton in 2017 from around $46 a ton at present.

Resolute Forest Products in Ontario reduced its newsprint capacity by 465,000 tons last year by closing a newsprint mill in Iroquois Falls, Ontario, while idling paper machines at two Quebec mills as 300 jobs are lost.

Paper Excellence (a multinational paper and pulp producer) announced in July the permanent closure of its mill in Howe Sound, British Columbia, which would remove 200,000 tons of capacity and 180 jobs. Several South Africans received job offers to work there but the offers were revoked.

Finning, the Canadian agent for Caterpillar announced that they would terminate 1400 employees worldwide, 1100 of which will be in Canada. Finning’s large branch in Sparwood (British Columbia) served the coal industry, but was recently closed down.

Although Canada has developed 150 000 new jobs in 2015 (As reported in the Toronto Star on Sat 4 Dec 2015), in November 2015 the country lost 35 000 jobs.

The world price of diamonds has weakened to the extent that De Beers Mining announced the temporary closure of their Snap Lake Mine and their decision to lay off 434 employees. Hundreds of employees will be transferred to other De Beers mines in Canada.

It seems as if commodity prices will remain low until 2017, before a recovery is possible (that is another 24 months).

What is the good news on the economic front?

  • The manufacturing sector is doing well, including the automotive sector in Ontario.
  • There are many positions available in the agriculture industry and many employers are interested in appointing foreign nationals in the agriculture industry.
  • Despite job losses in the natural resource sector, Canada developed 44 000 new jobs in October 2015.
  • Manitoba’s gain of 2,800 jobs in October means it continues to have the best job growth for total employment and private employment, for the first 10 months of 2015.
  • Saskatchewan’s unemployment is also low at 4.9%, which is the second lowest in Canada. According to a press release on 10 Oct 2015 from the Government of Saskatchewan, Regina has the lowest unemployment rate among major Canadian cities at 2.8 per cent and Saskatoon has the second lowest at 4.2 per cent.
  • Please see the October 2015 unemployment rates in percent, with October 2014 rates shown in brackets:

Canada 6.3 (6.0)
Newfoundland & Labrador 11.6 (10.8)
Prince Edward Island 8.3 (7.7)
Nova Scotia 6.9 (7.9)
New Brunswick 7.7 (8.9)
Quebec 6.8 (6.7)
Ontario 6.2 (6.2)
Manitoba 4.8 (4.6)
Saskatchewan 4.9 (3.0)
Alberta 6.0 (4.1)
British Columbia 6.0 (5.8)

  • The unemployment rate in Canada is still very low compared to many other countries such as South Africa where the unemployment rate is reported to be close to 45 %.
  • Canada is succeeding in food production. Canada exports meat, wheat and many other commodities. About $100 billion dollars in food are exported annually from Canada, which is approximately 6 -7 % of GDP and accounts for approximately 5-6 % of all jobs in Canada.
  • Immigrants are still streaming into Canada through provincial immigration programs (occupation lists) and many unique positions still exist for which Canadians cannot be found.
  • Although $74 billion was invested in Alberta last year, $45 billion dollars is still being invested in the Oil Industry during 2015.
  • Four Liquid Natural Gas (LNG) projects are being considered in North Western British Columbia in the coming years (Town of Kitimat and Prince Rupert), with a major announcement being expected in February 2016. The four major investors are reported to be AltaGas Ltd, Shell Canada Ltd, Petronas and ExxonMobil Corp. AltaGas Ltd leads a project named the Douglas Channel proposal ($500 million investment). Petronas is working on a Pacific Northwest project worth $36 billion, which is expected to be the first project. The Calgary based Veresen announced a $725 million gas processing complex near Fort St John in BC.