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Despite recession risks, study says Canadian provinces poised for growth

OTTAWA – New research from The Conference Board of Canada forecasts Canada’s provinces to continue seeing gross domestic product (GDP) growth in…

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OTTAWA – New research from The Conference Board of Canada forecasts Canada’s provinces to continue seeing gross domestic product (GDP) growth in 2022 through 2024, despite the overhanging risks of a recession. Saskatchewan and Alberta are projected to lead growth among the provinces.

“Continuing high inflation will likely cause households to tighten their purse strings in the latter part of 2022, with spending habits tapering once consumers have exercised their repressed travel urges,” said Ted Mallet, Director of Economic Forecasting at The Conference Board of Canada. “While there is the possibility of a recession, our view is that a ‘growth plateau’ is a better description of the economy slowing in response to the Bank of Canada’s inflation battle, before picking up again in 2023.”

A drought in Saskatchewan pulled down GDP in the region last year, but a major recovery is expected for 2022. The Conference Board of Canada projects real GDP to reach 7.6 per cent this year, driven by increases in the commodity sector, and 4.1 per cent growth in 2023. Growth will slow in 2024 but remain high at 2.4 per cent.

Similar to Saskatchewan, the commodity price increase is having a positive impact on Alberta overall. GDP in the province is projected to reach 4.9 per cent in 2022, 3.5 per cent in 2023 and 2.4 per cent in 2024. Employment has remained strong in the province in recent months, as jobs expanded 0.1 per cent while contracting nationally.

Spearheaded by significant increases in agriculture and manufacturing, the goods-producing sectors and steady growth on the service side will see Manitoba’s GDP grow by 4.2 per cent in 2022. This will be followed by another good year of 2.9 per cent growth in 2023 and 1.9 per cent in 2024.

British Columbia has a diverse economy, but global and national currents will continue to influence its course over the coming years. Commodity prices and interest rates are beyond the direct control of B.C.’s households and businesses and will have outsized influence in the province. Growth will slow over the coming quarters, but The Conference Board of Canada does not expect that it will slip negative. The province’s real GDP will grow by 2.6 per cent this year, 1.9 per cent in 2023 and 2.0 per cent in 2024.

Although it’s the country’s largest provincial economy, Ontario is feeling the impact of high inflation and rising interest rates. There is, however, reason for optimism as investments from governments and businesses continue to be made in the province, which will help boost the economy during the slowdown. The province’s economy is slated to grow 3.9 per cent in 2022, 1.7 per cent in 2023 and 2.2 per cent in 2024.

Despite seeing significant GDP growth of 1.7 per cent in the first quarter of 2022, Quebec will face growing headwinds throughout the rest of the year and is projected to grow 2.9 per cent this year and 1.2 per cent in 2023. Amid weakening consumer confidence, growth in household discretionary spending, especially on durables, is expected to slow. Meanwhile, demand for services will continue to be supported by the tailwinds of the pandemic reopening.

Newfoundland and Labrador will see the smallest expansion in Canada this year, with GDP growth of 0.5 per cent in 2022, 2.9 per cent in 2023 and 2.2 per cent in 2024. The province is benefiting from the Voisey’s Bay mine expansion and the Come By Chance refinery conversion, with both expecting to start production by the end of the year. Over the medium term, the province will see massive capital spending in its oil and gas sector.

The Conference Board of Canada forecasts Prince Edward Island’s GDP to grow 3.7 per cent in 2022, 1.7 per cent in 2023 and 1.9 per cent in 2024. Despite having the highest inflation levels in the country, the region saw employment levels hit an all-time record in June, with the biggest gains in construction and manufacturing.

Nova Scotia continues to rebound from the economic slowdown and is forecasted to see GDP growth of 3.2 per cent in 2022, 1.5 per cent in 2023 and 1.6 per cent in 2024. There is certainly reason for optimism in the province, as the Nova Scotia government announced a $5.7-billion investment in healthcare and has also continued investments in road upgrades as part of the provincial government’s Five-Year Highway Plan.

Driven by interprovincial and international migration, New Brunswick has seen its population grow at the highest rate since 1976. The provincial government is increasing the fee forestry companies pay to harvest timber on Crown lands by 30 per cent. The move comes after the price of lumber spiked in 2020 and continued to increase until May 2021, leading to record profits for forestry companies in the province. The province is projected to have GDP growth of 2.3 per cent in 2022, 1.3 per cent in 2023 and 1.4 per cent in 2024.

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Angry Shouting Aside, Here’s What Biden Is Running On

Angry Shouting Aside, Here’s What Biden Is Running On

Last night, Joe Biden gave an extremely dark, threatening, angry State of the Union…

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3 hours ago

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March 8, 2024

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Angry Shouting Aside, Here's What Biden Is Running On

Last night, Joe Biden gave an extremely dark, threatening, angry State of the Union address - in which he insisted that the American economy is doing better than ever, blamed inflation on 'corporate greed,' and warned that Donald Trump poses an existential threat to the republic.

But in between the angry rhetoric, he also laid out his 2024 election platform - for which additional details will be released on March 11, when the White House sends its proposed budget to Congress.

To that end, Goldman Sachs' Alec Phillips and Tim Krupa have summarized the key points:

Taxes

While railing against billionaires (nothing new there), Biden repeated the claim that anyone making under $400,000 per year won't see an increase in their taxes.  He also proposed a 21% corporate minimum tax, up from 15% on book income outlined in the Inflation Reduction Act (IRA), as well as raising the corporate tax rate from 21% to 28% (which would promptly be passed along to consumers in the form of more inflation). Goldman notes that "Congress is unlikely to consider any of these proposals this year, they would only come into play in a second Biden term, if Democrats also won House and Senate majorities."

Biden also called on Congress to restore the pandemic-era child tax credit.

Immigration

Instead of simply passing a slew of border security Executive Orders like the Trump ones he shredded on day one, Biden repeated the lie that Congress 'needs to act' before he can (translation: send money to Ukraine or the US border will continue to be a sieve).

As immigration comes into even greater focus heading into the election, we continue to expect the Administration to tighten policy (e.g., immigration has surged 20pp the last 7 months to first place with 28% in Gallup’s “most important problem” survey). As such, we estimate the foreign-born contribution to monthly labor force growth will moderate from 110k/month in 2023 to around 70-90k/month in 2024. -GS

Ukraine

Biden, with House Speaker Mike Johnson doing his best impression of a bobble-head, urged Congress to pass additional assistance for Ukraine based entirely on the premise that Russia 'won't stop' there (and would what, trigger article 5 and WW3 no matter what?), despite the fact that Putin explicitly told Tucker Carlson he has no further ambitions, and in fact seeks a settlement.

As Goldman estimates, "While there is still a clear chance that such a deal could come together, for now there is no clear path forward for Ukraine aid in Congress."

China

Biden, forgetting about all the aggressive tariffs, suggested that Trump had been soft on China, and that he will stand up "against China's unfair economic practices" and "for peace and stability across the Taiwan Strait."

Healthcare

Lastly, Biden proposed to expand drug price negotiations to 50 additional drugs each year (an increase from 20 outlined in the IRA), which Goldman said would likely require bipartisan support "even if Democrats controlled Congress and the White House," as such policies would likely be ineligible for the budget "reconciliation" process which has been used in previous years to pass the IRA and other major fiscal party when Congressional margins are just too thin.

So there you have it. With no actual accomplishments to speak of, Biden can only attack Trump, lie, and make empty promises.

Tyler Durden Fri, 03/08/2024 - 18:00

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United Airlines adds new flights to faraway destinations

The airline said that it has been working hard to "find hidden gem destinations."

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11 hours ago

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March 8, 2024

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Since countries started opening up after the pandemic in 2021 and 2022, airlines have been seeing demand soar not just for major global cities and popular routes but also for farther-away destinations.

Numerous reports, including a recent TripAdvisor survey of trending destinations, showed that there has been a rise in U.S. traveler interest in Asian countries such as Japan, South Korea and Vietnam as well as growing tourism traction in off-the-beaten-path European countries such as Slovenia, Estonia and Montenegro.

Related: 'No more flying for you': Travel agency sounds alarm over risk of 'carbon passports'

As a result, airlines have been looking at their networks to include more faraway destinations as well as smaller cities that are growing increasingly popular with tourists and may not be served by their competitors.

The Philippines has been popular among tourists in recent years.

Shutterstock

United brings back more routes, says it is committed to 'finding hidden gems'

This week, United Airlines  (UAL)  announced that it will be launching a new route from Newark Liberty International Airport (EWR) to Morocco's Marrakesh. While it is only the country's fourth-largest city, Marrakesh is a particularly popular place for tourists to seek out the sights and experiences that many associate with the country — colorful souks, gardens with ornate architecture and mosques from the Moorish period.

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"We have consistently been ahead of the curve in finding hidden gem destinations for our customers to explore and remain committed to providing the most unique slate of travel options for their adventures abroad," United's SVP of Global Network Planning Patrick Quayle, said in a press statement.

The new route will launch on Oct. 24 and take place three times a week on a Boeing 767-300ER  (BA)  plane that is equipped with 46 Polaris business class and 22 Premium Plus seats. The plane choice was a way to reach a luxury customer customer looking to start their holiday in Marrakesh in the plane.

Along with the new Morocco route, United is also launching a flight between Houston (IAH) and Colombia's Medellín on Oct. 27 as well as a route between Tokyo and Cebu in the Philippines on July 31 — the latter is known as a "fifth freedom" flight in which the airline flies to the larger hub from the mainland U.S. and then goes on to smaller Asian city popular with tourists after some travelers get off (and others get on) in Tokyo.

United's network expansion includes new 'fifth freedom' flight

In the fall of 2023, United became the first U.S. airline to fly to the Philippines with a new Manila-San Francisco flight. It has expanded its service to Asia from different U.S. cities earlier last year. Cebu has been on its radar amid growing tourist interest in the region known for marine parks, rainforests and Spanish-style architecture.

With the summer coming up, United also announced that it plans to run its current flights to Hong Kong, Seoul, and Portugal's Porto more frequently at different points of the week and reach four weekly flights between Los Angeles and Shanghai by August 29.

"This is your normal, exciting network planning team back in action," Quayle told travel website The Points Guy of the airline's plans for the new routes.

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Walmart launches clever answer to Target’s new membership program

The retail superstore is adding a new feature to its Walmart+ plan — and customers will be happy.

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11 hours ago

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March 8, 2024

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It's just been a few days since Target  (TGT)  launched its new Target Circle 360 paid membership plan. 

The plan offers free and fast shipping on many products to customers, initially for $49 a year and then $99 after the initial promotional signup period. It promises to be a success, since many Target customers are loyal to the brand and will go out of their way to shop at one instead of at its two larger peers, Walmart and Amazon.

Related: Walmart makes a major price cut that will delight customers

And stop us if this sounds familiar: Target will rely on its more than 2,000 stores to act as fulfillment hubs. 

This model is a proven winner; Walmart also uses its more than 4,600 stores as fulfillment and shipping locations to get orders to customers as soon as possible.

Sometimes, this means shipping goods from the nearest warehouse. But if a desired product is in-store and closer to a customer, it reduces miles on the road and delivery time. It's a kind of logistical magic that makes any efficiency lover's (or retail nerd's) heart go pitter patter. 

Walmart rolls out answer to Target's new membership tier

Walmart has certainly had more time than Target to develop and work out the kinks in Walmart+. It first launched the paid membership in 2020 during the height of the pandemic, when many shoppers sheltered at home but still required many staples they might ordinarily pick up at a Walmart, like cleaning supplies, personal-care products, pantry goods and, of course, toilet paper. 

It also undercut Amazon  (AMZN)  Prime, which costs customers $139 a year for free and fast shipping (plus several other benefits including access to its streaming service, Amazon Prime Video). 

Walmart+ costs $98 a year, which also gets you free and speedy delivery, plus access to a Paramount+ streaming subscription, fuel savings, and more. 

An employee at a Merida, Mexico, Walmart. (Photo by Jeffrey Greenberg/Universal Images Group via Getty Images)

Jeff Greenberg/Getty Images

If that's not enough to tempt you, however, Walmart+ just added a new benefit to its membership program, ostensibly to compete directly with something Target now has: ultrafast delivery. 

Target Circle 360 particularly attracts customers with free same-day delivery for select orders over $35 and as little as one-hour delivery on select items. Target executes this through its Shipt subsidiary.

We've seen this lightning-fast delivery speed only in snippets from Amazon, the king of delivery efficiency. Who better to take on Target, though, than Walmart, which is using a similar store-as-fulfillment-center model? 

"Walmart is stepping up to save our customers even more time with our latest delivery offering: Express On-Demand Early Morning Delivery," Walmart said in a statement, just a day after Target Circle 360 launched. "Starting at 6 a.m., earlier than ever before, customers can enjoy the convenience of On-Demand delivery."

Walmart  (WMT)  clearly sees consumers' desire for near-instant delivery, which obviously saves time and trips to the store. Rather than waiting a day for your order to show up, it might be on your doorstep when you wake up. 

Consumers also tend to spend more money when they shop online, and they remain stickier as paying annual members. So, to a growing number of retail giants, almost instant gratification like this seems like something worth striving for.

Related: Veteran fund manager picks favorite stocks for 2024

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