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CANADA 2023
Green transition and a strong economy
Ottawa, March 6th 2023
http://www.oecd.org/economy/canada-economic-snapshot/
The economy has fully recovered from the COVID shock
Real GDP
Note: The Bank of Canada aims to keep inflation close to the 2% midpoint of a control range from 1 to 3% over the medium term.
Source: OECD (2022), Main Economic Indicators (database). 4
The cost of living has increased
Consumer price index, index Q1 2019 = 100
Macroeconomic projections
2023 2024
Gross domestic product 1.3 1.5
Private consumption 1.3 1.5
Gross fixed capital formation -1.0 1.5
Exports 2.5 1.9
Imports 1.4 1.4
Unemployment rate (%) 5.3 5.7
Consumer price index 4.0 2.4
Current account (% of GDP) -1.5 -1.5
Note: The table shows annual growth rates unless otherwise specified.
Source: OECD Economic Outlook 112 and OECD calculations.
7
Public debt reduction is underway
Public debt, % of GDP
Note: Data for 2022 are estimates. Gross debt includes general government liabilities in the form of currency and deposits; debt securities,
loans; insurance, pensions and standardised guarantee schemes, and other accounts payable. Net debt subtracts financial assets from
gross debt. 8
Source: OECD Economic Outlook 112 (database).
The housing market has softened
Real house prices
Note: the childcare fees are based on a survey of households across 37 cities in Canada. This chart shows the results for the major cities of the
four most populous provinces. The policy target for 2022 is for a 50% reduction in the 2019 childcare costs by end 2022. The "final policy goal” is
based on the stated policy goal of CAD 10 per day (it assumes 20 days childcare per month).
10
Source: Centre for Policy Alternatives.
BOOSTING
PRODUCTIVITY
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Productivity growth is key to boost living standards
Bank of Canada (2017) 10% reduction in trade barriers +0.6% over 3 years
Note: Estimated impacts are on Canada’s real GDP unless otherwise specified.
Sources: See Table 1.9 in the 2023 OECD Economic Survey of Canada.
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TRANSITIONING TO
A GREEN ECONOMY
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Canada has ambitious GHG emissions targets
GHG emissions
Note: The solid blue line shows historical GHG emissions. The dotted line shows the emissions reductions required to meet 2030 and
2050 targets along an indicative pathway. The green line shows emissions projections by Environment and Climate Change Canada.
Source: Calculations based on OECD (2022), Environment Statistics (database); Climate Action Tracker; and ECCC. 16
Reaching net zero will be challenging
Total GHG emissions per unit of output, 2020 or latest
Note: Emissions data exclude emissions from land use, land use change and forestry (LULUCF). Units of GDP are given in USD, 2015 PPP.
Source: OECD Environment Statistics (database); OECD Economic Outlook (database). 17
Barriers to electricity trade are significant
Average residential electricity prices in selected North American cities
CAD/kWh
0.4
US cities Canadian cities
0.3
0.2
0.1
0.0
Portland
Calgary
Regina
Vancouver
St John's
Montreal
Toronto
Seattle
Halifax
Chicago
Detroit
New York
Boston
Winnipeg
Note: The chart shows average prices, including taxes, on 1 April 2022. 18
Source: Hydro Quebec
All sectors will have to contribute to the net zero effort
GHG emissions
Mt CO2 equivalent
Note: EVs include battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). The graph shows the EV share of
new vehicle sales. 20
Source: IEA (2022), Global EV Data Explorer, IEA, Paris.
Emissions pricing helps foster low-cost abatement
Note: Effective carbon rate is the price per tonne of CO2-equivalent and reflects explicit carbon prices, fuel excise and fossil fuel subsidies.
Source: OECD Centre for Tax Policy and Administration.
21
Tighter energy standards and retrofitting can reduce
emissions from buildings
Carbon intensity of housing, 2019
Note: The countries presented in the graph are selected based on heating degree days – the number of days where the average temperature
falls below the level at which residents typically turn on heating. 22
Source: OECD (2021), Brick by Brick: Building Better Housing Policies, OECD Publishing, Paris.
Flood insurance should be more widely available
Note: The chart shows the share of economic losses insured based on the midpoint of two estimates: the share of total losses that were
insured, and the average of the share of insured losses across each individual event.
Source: OECD calculations based on data provided by Swiss Re sigma and PCS. Reported economic losses are included only for 23
events for which an insured loss estimate is also available.
Main recommendations on monetary and fiscal policy
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Main recommendations to lift long-term growth
25
Main recommendations on social policy
26
Main recommendations for transitioning to a net zero
economy
27
Main recommendations for transitioning to a net zero
economy (continued)
• Continue support for carbon capture investments while
consolidating subsidies as technologies improve.
• Maintain targeted electric vehicle support while EV markets are
maturing.
• To improve public transport viability, provinces and cities should
increase use of road user charging and pare back constraints on
housing supply.
• Encourage fast provincial adoption of federal building energy
codes.
• Target home retrofitting support to middle and lower-income
households. 28
For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data
by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank
under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the
delimitation of international frontiers and boundaries and to the name of any territory, city or area.
http://www.oecd.org/economy/canada-economic-snapshot/
OECD Economics
OECD
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