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In 2017 Canada had the 18th largest GDP (PPP), trailing the U.S. by roughly $18 trillion. Canada’s national currency, the Canadian dollar (CAD), is often referred to as loonies. The Canadian dollar makes up ~2% of world currency reserves. The Bank of Canada serves as the country’s central bank. The primary objectives differ from our own Federal Reserve’s dual mandate. Their goals are to maintain a low inflation rate and a flexible exchange rate--as opposed to the Federal Reserve’s goals of stable prices and maximum employment. Canadian banks tend to be more conservative than their U.S. counterparts. A key difference is the duration and terms of standard consumer mortgages. Canadian mortgages are generally up to 5-years and prepayment fees are quite high.

In 2017 Canada’s largest export markets were the United States (73%), China (4.9%), Japan (2.9%), and South Korea (1.2%). Their largest import markets were the United States (46%), China (15%), Mexico (6.7%), Germany (3.8%), and Japan (3.6%). Canada’s primary export is crude petroleum and its primary import is cars.

Canada’s inflation rate rose 1.5% year-over-year in February as measured by the increase in the Consumer Price Index, up from 1.4% in January. All eight major components of the index were up indicating overall prices increases, but the majority of the increase was due to the cost of food and shelter. For the month, the CPI increased by 0.7% to 134.5. Since 1915, Canada’s average inflation rate has been 3.14%.   

The Canadian Housing market is heading towards its worst year in the last decade. Last month, the average home price was down 5.2%, which is the lowest in the past ten years. The Canadian government is in process of refining their mortgage regulations, as they want to keep houses affordable while keeping risks of lending low. Banks are getting the money to lend these mortgages by selling bonds. The bond yield In Canada has been decreased to 1.45%, which is the lowest it has been since 2017. Canada is likely to hold their interest rate steady through 2020, and there is a possibility of some interest rate cuts as well.

Canada recently reported labor statistics for the month of April. Data revealed one of the largest single-month job gains in recent history with over 106,500 jobs added to the labor force, dropping the unemployment rate to 5.75%. This hopeful news comes as Canada’s economy had been showing signs of slowing growth and weakening economic activity. The jobs gain is seen as broad-based with growth in both goods and service and across multiple sectors. Additionally, the private sector experienced a majority of the gain with a large portion of jobs being created for younger generations. Wages and total hours worked also rose higher all pointing to the positivity in Canada’s labor market amidst the overall sluggish economic performance. This bright spot is currently overshadowed by the weak housing market, high-interest rates, and lackluster oil prices.