Phil Smith

For those interested in the picky details of today's Canadian national accounts release for the 3rd quarter, here is a collection of 100 charts for key time series. Expand the graphic below or for perhaps easier viewing go to this URL: www.philipsmith.ca/Canadian_nat...

The federal government has been gradually and steadily withdrawing from direct participation in Canadian R&D spending for the last half century. Perhaps it could help raise productivity growth by reversing this trend. #cdnecon

Canada's 3rd quarter national accounts are scheduled for release tomorrow. The US 3rd quarter national accounts first estimates are scheduled for a late release, Dec 23, due to the government shutdown. Here are the Q2 US estimates, for comparison purposes. philipmsmith.shinyapps.io/NatAcctsUSA/

Once a year StatCan classifies all government spending into functional categories, thereby revealing how the broad collective priorities of the governments are evolving. It's interesting how social protection and health always fluctuate in opposite directions. #cdnecon

In general, current account deficits are neither 'good' nor 'bad'. It depends on the circumstances. Such deficits imply net borrowing from other countries and they are implicitly counterbalanced by net lending by the other sectors collectively - households, businesses and governments.

September employment dropped -0.3% according to SEPH, although employment for both hourly-rated and salaried workers each rose 0.3%. The decline was accounted for by employees receiving commissions, piece rates, mileage allowances or working owners. #cdnecon
philipmsmith.shinyapps.io/SEPHbrowser/

Canada's current account deficit was reduced by more than half in the 3rd quarter as the trade deficit narrowed. #cdnecon

Railway carloadings in the east have been flat overall this year, although as in the west the wood products category continues to decrease.

Total railway carloadings in the west fell 6.2% between May and September this year and further declines seem likely given the US tariffs. The wood products category has continued to plunge due to several factors including steep US tariffs. Manufactured products have been flat since mid 2023.

Here's an interesting categorization and analysis of supply shocks, from Brookings. It focuses on 115 instances relating to global supply chains, productivity issues, pandemics, commodity prices, natural disasters, labour supply, critical inputs & import prices.
www.brookings.edu/wp-content/u...

The StatCan report provides no such details, but the quarterly reports of Rogers, Bell and Telus do. It's several things, including non-cash revaluation gains, the strong Blue Jays season and debt repurchase. The easiest way to get this info is with an AI agent.

Corporate profits before taxes in Canada hit a new peak in the 3rd quarter, rising 7.6% from the 2nd quarter, StatCan reported yesterday. The previous pre-tax peak was in 2022 Q2. Telecomm profits jumped an extraordinary $10.4 billion but these were mostly one-time non-operational gains. #cdnecon

I knew NFL teams were expensive to buy, but had no idea the 32 teams together added a hefty US$227 billion to the US balance sheet.

Measuring aggregate government productivity A near impossible task because while we know what government output costs, we do not know what it is worth

I invite you to read my new (and free) Substack paper on the difficulties involved in measuring government productivity. philip635.substack.com/p/measuring-...

There are several Canadian housing price indicators available. Here is StatCan's, which is based on a survey of construction companies. It shows big and continuing declines since March 2022 in the CPI-adjusted prices of both land and the houses themselves. But there are wide geographical variations.

As Canada works to restructure its international trade toward countries other than the US, its effort is aided by the falling broadly-defined average effective currency exchange rate vis-à-vis those countries (blue line). However rates remain well above where they were at the turn of the century.

Today StatCan reported that "Canada's natural resource wealth—the dollar value of selected natural resource reserves—decreased by 10% from $1,520 billion in 2023 to $1,362 billion in 2024." The unavoidable vulnerability of Canada's resource economy to changing world commodity prices explains this.

Here are the implicit overall capital depreciation rates by industry. I suspect the movement in these rates through time is more a reflection of the changing composition of investment than of changes in the durability of specific capital assets. #cdnecon

While investment has been stagnant, the capital stock has continued to grow, albeit at a slower rate than prior to 2015. This appears to be because the weakness in investment has been disproportionately in the machinery and equipment category, which has a higher average depreciation rate. #cdnecon

Canada's productivity growth has flatlined and it's clear we need more investment. StatCan released investment and capital stock data by industry this week for 2024. Total investment has shown no net growth since 2014, when world energy prices plunged. Many industries account for this. #cdnecon

A Tiny West Wing Office Is Big on Trump Messaging

The narcissist.
www.nytimes.com/2025/11/14/u...

They have just two parties and before the current Trump revolution they tended to alternate back and forth in power. If US policy on, say, taxes, health or immigration did too, there would be great instability. The filibuster brings stability. It's hard to make big change and hard to reverse it too.

I would disagree.

Personally I favour government borrowing to pay for infrastructure such as roads, bridges, ports, airports, energy transmission routes and so on. The government can own and rent this infrastructure, or sell it to the private sector. Such investments can facilitate growth in private sector activity.

Many Canadian economists worry about our real GDP growth relative to the US counterpart over the last decade (often in per capita terms) while also worrying about Canada's federal deficits being too big. But you cannot have your cake and eat it too. Huge US deficits have been hugely stimulative.

Our Canadian oligarchs are getting older as well as richer and more numerous. Their median age was 60, their median income was $5,366,400 and the threshold income for entry into the top 0.01% of tax filers was $3,487,600 in 2023. They had 1.3% of total income and paid 3.0% of income taxes. #cdnecon

Canada's LFS full-time employment has been growing well below its post-pandemic trend line this year. For the 55+ age group, growth stopped in 2024. Private sector employment weakened first, but lately public sector growth has slackened too. Self-employment has dipped only in the last three months.

Politicians can be so ignorant and just plain stupid sometimes when trying to defend the indefensible.

Here's an update to my set of 100 Canadian monthly economic indicator charts. #cdnecon
www.philipsmith.ca/Canadian_mac...

Today's release from Rentals.ca indicates average asking rents continued to fall in October. A good sign for the "affordability" problem. #cdnecon