The economic year 2017 and is marked by a healthy dose of unpredictability

Photo: Sean Kilptarick The canadian Press
The renegotiation of the Agreement on free trade in north america was marked by the year 2017.

The economic year 2017 has been responsible, in Québec and in Canada as elsewhere. Between the growth rate amazing, hard business terms, and a debt ratio that shows no sign of slackening, the table is set for a year 2018 just as unpredictable. Overview in four parts.




Budget Surplus, an unemployment rate in free fall, increase of the credit rating… It would be wrong to suggest that the year 2017 was boring. After having posted a gain of 1.4% in 2016, the Québec economy has come back, with a jump of nearly 3 %. This acceleration of gross domestic product, reported the team of economists of the Movement Desjardins, translated his best performance in the last fifteen years. Given the annualized growth of 4.3 % in the third quarter, it reported last week, the Québec economy is doing ” better than expected “. In the background, the unemployment rate, which was 6.2 % at the beginning of the year, has shrunk to 5.4 per cent.


During this time, in Quebec, the budgetary surplus of $ 4.6 billion in two years have given rise to additional tax relief of $ 1.1 billion. The gesture, announced a year of the next election, has led many to blame the government Couillard to have cut spending in order to prepare the elections of October 2018. While the minister Carlos Leitão spoke of ” fiscal discipline “, the critic of the Parti québécois in the field of finance, Nicolas Marceau, said that” we witnessed the start of the election campaign, liberal [funded] by the money of Quebec, by [cuts] important in the services “.




The “technical recession” caused by the collapse of oil prices in 2015 seems far away. Who would have thought that the canadian economy would return as quickly to the top of the standings in the G7 for its annual growth ? “The economy is expected to see its strongest growth since 2011, thanks to consumer spending and the real estate market,” wrote the Conference Board in its balance sheet as of the end of the year. Finally, the portrait should show the appearance of 329 000 new jobs, ” the gain is the highest in the last ten years “, according to the organization. The canadian economy is expected to be completed in 2017 for a gain of 3 %, which will retract to 2.1 % next year.


Photo: Jacques Nadeau Le Devoir
The easy credit of recent years and the continuing rise in real estate prices have had the effect of adding to the burden of Canadians.

This is the face of this growth that the Bank of Canada has pulled the trigger without warning this summer. The governor, Stephen Poloz, announced in July an increase of 25 basis points in the interest rate, a first in seven years, and then repeated the gesture in September in order to bring it to 1 %. Reason ? The economy, said the central bank is more robust than expected, and its growth is ” more autonomous “.




That said, consumer spending, however, says debt. The easy credit of recent years and the continuing rise in real estate prices have had the effect of adding to the burden of citizens, whose debt ratio key regularly new records. According to Statistics Canada, the ratio of the debt relative to household income has now reached 171,1 %. Of course, many economists don’t like to rely solely on this figure, because it compares a passive to a flow of money. This is the reason for which they analyze also what is the cost of debt : the weight of the monthly interest compared to disposable income. It is relatively stable at approximately 14 %. But the general state of the premises concerned, including the Bank of Canada. Because an increase in the interest rate indirectly influences the rest. Already, the real estate market has been the subject of measures of tightening in 2016, to curb the increase of prices in some regions and a tax was applied to foreign purchases in British Columbia. Ontario has taken the same action in 2017. The quebec market, at least for the moment, has not shown sign of overheating. “The likelihood of a sudden reversal to the downside [on the montreal market] is low,” wrote the Royal Bank in November. However, ” the gradual erosion of affordability is a factor that must be monitored “.


United States


How to say ? The two largest trading partners in the world, from one day to the next day, came to the negotiating table to return to the free trade Agreement of north america, a case that was believed to be classified. This new deal, which has added to the renegotiation of the trade of timber, marked the year of 2017, as few had imagined. If the american president has seemed to want more in Mexico at times, the beginning of negotiations in August began on the hats of wheel. Even if the trade between the three countries has exploded since the 1990s, the us Trade representative Robert Lighthizer, has publicly stated that Mr. Trump “wants not only to revisions of the clauses or the modernisation of a few chapters “because” we are of the opinion that NAFTA has fundamentally disappointed many, many Americans “. According to the New York Times, however, governors-republicans would very strongly makes clear to the vice-president Pence their annoyance with the state of the negotiations. To complicate things, add to the complaint of the Boeing Bomber, which the u.s. department of Commerce concurred. In short, what to do, talking to them during the next round of negotiations of the NAFTA, scheduled from 23 to 28 January in Montreal.