CashNews.co
Uncertainty over Canada’s rapid population growth has muddied the Bank of Canada’s view of the economy, prompting discussion about whether certain demographics should be removed from the central bank’s calculations.
“Members agreed that uncertainty about population growth was contributing to uncertainty about the economic outlook,” BoC policymakers wrote in their latest summary of deliberations published earlier this month. “Members expected consumer spending to strengthen in 2025, even as population growth slowed. However, this outlook was clouded by differences among segments of the Canadian population.”
According to Statistics Canada data released last Friday, GDP per capita fell 0.1 per cent in the second quarter, marking a fifth consecutive quarterly decline. That means the economy is not expanding fast enough vis-a-vis population growth.
However, Derek Holt, vice-president and head of capital markets economics at Scotiabank, says the Bank of Canada “should not treat all bodies as having the same impact” on the economy.
“Students, temp foreign workers and asylum seekers are not contributing one-for-one in proportionate terms to GDP growth as others, so why treat them as such?” Holt wrote in an Aug. 28 research note.
“The economy is performing better in real per-capita GDP terms than some say because many non-permanent residents should be removed from the calculations.”