Submitted by Yasir Naqvi, MP for Ottawa Centre
Summer is in full swing, with many events big and small in our community! I hope you have had the chance to enjoy the Jazzfest, Bluesfest, Lebanese and Greek festivals, and many other neighbourhood activities. These have been amazing opportunities for me to connect with so many of you.
In my conversations with constituents, I sense real anxiety about jobs, wages, mortgages, rent and food prices. It is totally understandable as we know that the global economic uncertainty is caused by the pandemic, and exacerbated by conflicts in Ukraine and the Middle East. These events have a direct impact on our lives.
As we recover from the pandemic, the cost of housing has skyrocketed, making the dream of owning a home more elusive for younger Canadians and the economically disadvantaged. In terms of everyday life, the cost of purchasing essential goods; everything from fuel to groceries, rose dramatically. Inflation hit 8.1% mid-way through 2022 and household debt in Canada continues to surpass the G7 average of 125 per cent related to the disposable income households can access. The corresponding rise in interest rates to combat inflation increased the challenges for those seeking financing or renewing their mortgages.
The good news is that the Canadian economy is outperforming expectations. In the face of higher interest rates, Canada has avoided the recession that some had predicted. Inflation has fallen from its June 2022 peak of 8.1 per cent to 2.7 per cent in July 2024. As such, the Bank of Canada has lowered the interest rate from 5 per cent to 4.75 per cent, making Canada the first G7 country to initiate a rate cut.
The labour market remains solid. Over 1.1 million more Canadians are employed today than before the pandemic, marking the fastest jobs recovery in the G7. Real wages (that is, wages adjusted for inflation) have gone up, meaning Canadians, on average, have more purchasing power.
Private sector forecasters expect that the year ahead should bring further progress. By the end of the year, they expect economic growth will pick up, interest rates will be lower, and inflation will decline to about 2 per cent. Both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) project that Canada will see the strongest economic growth in the G7 in 2025.
But, there’s more to do. Through Budget 2024, the federal government is making significant investments in health care, early learning and childcare, better integration of newcomers, boosting housing supply, and fostering historic investments for the net-zero transition. These investments ensure people are healthy and able to contribute to their full potential in the labour force. For instance, affordable childcare has helped women in their prime working years to reach a record high employment rate of 85.7 per cent in September 2023, compared to just 77.4 per cent in the United States.
All in all, Canada’s economic fundamentals are strong. However, we need to ensure the economy works for you, with a good job, higher pay, and more money in your pocket. That is the important work ahead of us, and as your MP it is my focus.