April webcast
Our monthly economic webcast for April is now available, entitled “Soft landing narrative still intact.”
Strong economic data
Economic data continues to convey not just resilience but strength. Global economic surprises have continued to surge since the start of the year (see next chart).
Global economic surprises on an upswing
As of 04/05/2024. Sources: Citigroup, Bloomberg, RBC GAM
Another recession signal we track is whether real global trade is declining. This signal has just reversed its recession call as its annual rate of change has now reverted back to positive territory (see next chart). The likelihood of a soft landing continues to rise, in part as the economic data improves, in part as recession signals fade, and in part as we chomp through the period of time with the highest theoretical vulnerability. We now ascribe a 65% probability that the U.S. economy continues to grow over the coming year, up from the prior 60% estimate. The likelihood of a soft landing isn’t quite as high in other developed markets, but it is also increasing and now above 50%.
Global trade is improving
As of Jan 2024. Shaded area represents U.S. recession. Sources: CPB Netherlands Bureau for Economic Policy Analysis, Macrobond, RBC GAM
Incidentally, you may recall a fierce economic debate in 2021-2022 about whether the extraordinarily high level of job openings at the time could be resolved without the unemployment rate also rising (in so doing, potentially triggering a recession). As the Beveridge Curve shows, job openings and unemployment have historically moved hand in hand. There was no modern precedent for job openings falling materially without significant damage to the unemployment rate. And yet this is precisely what has happened (see next chart). Job openings plummeted over the past two years, with only a marginal rise in unemployment.
We were on the wrong side of the argument, as it happens. In turn, a recession has seemingly been avoided.
U.S. Beveridge curve: Job openings fall without damaging employment
As of Jan 2024. Sources: U.S. Bureau of Labor Statistics, RBC GAM
The bellwether U.S. Institute for Supply Management (ISM) Manufacturing index continues its ascent from a late 2023 trough (see next chart).
U.S. manufacturing activity has bounced off floor
As of Mar 2024. Shaded area represents recession. Sources: Institute for Supply Management, Macrobond, RBC GAM
The ISM Services index was slightly weaker than the month before, but with a reading of 51.4, it is still in line with the average of the past year. It’s also consistent with modest to moderate economic growth.
U.S. payrolls for March exceeded expectations, recording a rollicking 303,000 new jobs. Notably this was without the negative revisions to earlier months that have plagued some recent reports. Accordingly, the unemployment rate fell from 3.9% to 3.8%.
U.S. consumer confidence has also leapt higher. The University of Michigan sentiment index reached its highest reading in almost three years. The other main consumer confidence metric in the U.S. is admittedly more mediocre. The former tends to say more about spending, while the latter usually says more about the labour market.
Elsewhere, the eurozone Composite Purchasing Manager Index edged above the all-important 50 threshold for the first time in nearly a year in March. Data change indices for the eurozone, UK, Japan and Canada all show improvement.
In a world filled with thousands of economic indicators, some have inevitably failed to align with this more positive trend. A notable example for Canadians is the latest employment report. It revealed the loss of 2,200 jobs in March. This sent the unemployment rate skittering higher, from 5.8% to 6.1%. It is now 1.1 percentage points higher than the cycle low.
But the report was not quite as somber as it first looks. The higher Canadian unemployment rate had more to do with a jump in people seeking work than the number of job losses. In other words, Canada’s population growth is exceeding the rate of (trend) job creation. This isn’t great, but population growth should start to slow and the economy is still adding jobs more often than it is shedding them.
To illustrate, Canada enjoyed seven consecutive months of job creation before the March decline. Private sector employment actually rose by 15,000 in March, and public sector increased by 12,000. What, then, declined? It was self-employed positions falling by 29,000 jobs. While some self-employed jobs are of a high quality and some are even the seed for what eventually grows to be an enormous enterprise, the reality is that the average self-employed person works fewer hours and earns less money, meaning their loss is less damaging to the economy. One might even imagine that some of the self-employed people simply pivoted to better jobs in the private or public sector.
But the main point is that the Canadian economy will probably return to job creation given the expectations set in the latest Business Outlook Survey.
Why wasn’t there a recession?
It is a bit premature to answer the question “why wasn’t there a recession?” since the risk of a recession has not entirely vanished. We still put it at a 35% chance for the U.S. over the next year. Nevertheless, we can take a stab at an answer and then revisit later should the circumstances change.
To answer the question “Why wasn’t there a recession?” it is arguably first necessary to answer, “Why did so many people expect a recession (ourselves included)?” The answer here is fairly straight-forward:
Central banks were raising rates aggressively, and most monetary tightening cycles culminate in a recession, even when they are pursued with less vigour.
Historical experiences with inflation dating back to the 1960s shows that a recession resulted within a few years every time inflation spiked by more than about 5 percentage points.
In late 2022 and early 2023 there were a lot of additional economic headwinds. These included the corrosive effects of ultra-high inflation, supply chain problems (which resonate well beyond their impact on prices), a locked-down Chinese economy (normally the biggest driver of global growth in the world), and banking-sector distress in the U.S.
A remarkable array of recession signals began blinking red. Yield curves inverted. Lending standards tightened. Corporate profit margins declined. The unemployment rate rose as did Google News searches for ‘recession.’ Global trade declined. A variety of econometric recession models were sending off alarm bells.
In large part in response to the aforementioned issues, our main econometric model of the economy predicted a recession.
Our business cycle scorecard indicated the business cycle was growing late, indicating a vulnerability to a downturn.
Few recessions over the past several decades have had so many headwinds aligned. This made the usually difficult task of predicting a recession fairly easy, and indeed many analysts did so.
So why didn’t a recession actually happen? Here are the top 10 reasons.
Some of the smaller headwinds went away over the latter part of 2022 and into early 2023. Inflation significantly normalized. Supply chain problems were largely resolved. China’s economy re-opened and U.S. banking distress faded. The likelihood of a recession remained considerable after this, but no longer as seemingly certain.
A lot of countries did suffer economically from higher interest rates. Prominently, the UK, Germany and Japan all suffered two consecutive quarters of declining economic output. This is popularly called a “technical recession.” Canada’s economy essentially stagnated in 2023. We ultimately push back against the idea that these were true recessions since the countries’ labour markets held up much better than one would normally expect in a proper recession. But the point is that you can debate whether a recession actually did happen or not across a fair chunk of the developed world. At a minimum, genuine economic damage occurred.
The U.S. was exceptional in all of this. Part of that was anticipated due to a lower sensitivity to interest rate movements given lower private-sector leverage, long 30-year mortgage terms and high corporate cash balances. But the degree of the insensitivity was nevertheless surprising given that many marginal economic decisions are still made at the prevailing interest rate. Furthermore, U.S. consumers proved much more willing to spend than expected, more than in other countries -- even after factoring in past inclinations, accumulated pandemic savings and lingering government support. Finally, the U.S. unexpectedly enjoyed a great deal of fiscal stimulus in 2023 despite the fact that the budget pointed to fiscal austerity. The Congressional Budget Office badly misjudged the extent to which pre-existing tax credits would be taken up, among other factors. These credits added a remarkable $300 billion of support to the economy in a year when a drag was initially expected. This was a big part of the forecast miss.
Many developed countries – including the U.S., UK and Canada – experienced surging migration in 2023. This resulted in faster population growth and thus rising demand that likely helped to ward off a contracting economy. Much of this immigration came through non-traditional channels, defying easy anticipation.
The difficulties companies had hiring people after the pandemic (and the excess layoffs that occurred during the pandemic) may have encouraged companies to hoard labour and hold the line on capital expenditures, even as demand for their wares softened. In turn, a vicious circle was avoided even though the rate of U.S. gross domestic product (GDP) growth fell below its theoretical “stall speed” at the end of 2022.
Another post-pandemic distortion may be a greater willingness to live in the moment, with spending accordingly higher than it otherwise would have been. Consumers have helped to keep the economy going.
Modern economies may be less vulnerable to recessions than before. Supporting this idea, recent economic cycles have been unusually long – and the period of growth preceding the pandemic was especially so. Indeed the past three downturns have all been primarily the result of exogenous shocks as opposed to economies naturally succumbing to “business cycle” recessions. Inventory swings used to play a large role in triggering recessions, whereas now they are an afterthought in an era of just-in-time inventories and as the economy shifts toward services – many of which are subscription-based and thus highly stable (like a cell phone bill). It could also be that economic actors are less likely to irrationally panic and overreact. They don’t curtail their spending more than they strictly need to. They are also more cautious in laying off workers.
There haven’t been very many recessions in modern history. It may simply be that some of the recession signals with an observed 100% track record really only ever meant something like a 70% theoretical chance of a recession. We just needed more data. With the extra data point from this cycle, we can accordingly downgrade the importance of these recession indicators.
In particular, one can mount an argument that monetary tightening cycles are less of a reliable predictor of recessions than commonly imagined. While 10 of the past 13 U.S. tightening cycles have culminated in a recession, there may have been some luck involved in the case of the other three. You would be hard pressed to argue that the past three recessions – the pandemic, the global financial crisis and the dot-com bubble – were primarily the result of rising interest rates (see next chart).
U.S. monetary tightening cycles do not always predict recessions
As of Mar 2024. Recession shading in grey. Red text = recession outcome, green text = no recession, and blue text = debatable causality. Sources: Federal Reserve Board, Macrobond, RBC GAM
It is also possible to poke holes in some of the individual recession signals. For instance, the U.S. yield curve would be much less inverted today – if inverted at all – if one adjusts for the unnaturally small term premium that prevails today. Temporary employment has been falling for some time – which historically has been quite an accurate recession predictor. But temporary employment may be falling not because companies are shedding the workers that are easiest to let go, but for the unusual reason that companies are keen to convert the workers to permanent status.
Of course, hindsight is always 20/20. There are always “this time is different” narratives for any major economic question, and they are frequently hokum.
The reality is that a recession looked extremely likely from the vantage point of the second half of 2022, and pretty likely across much of 2023 as higher interest rates took hold. It is really only as 2023 came to a close and 2024 began that recession signals seriously started to reverse. We began to pass unscathed through the window of maximum theoretical risk, the serial outperformance of the U.S. economy became undeniable, and interest rate cuts came into view.
We discussed some of these ideas and our motivation for an upgraded soft-landing forecast in an earlier #MacroMemo (be warned the assigned probability was slightly different then).
Lessons learned along the way include:
Some of the sure-fire recession signals are apparently less certain than they initially seemed.
Economies may now be somewhat less rate sensitive than in the past.
Economies may be somewhat more durable in general.
The U.S. fiscal trajectory can be quite different in practice than in theory.
All of this provided a useful reminder that the error bars around any economic forecast remain quite large.
Baltimore port obstruction
Supply chain issues are still front-of-mind for investors and inflation-forecasters alike after the intense dislocations suffered between 2020 and 2022. Nothing compares to that experience today, though the global shipping environment is not without recent complications.
Access to the Suez Canal via the Red Sea remains restricted due to the efforts of Houthi rebels. Shippers have now largely adjusted by transiting around Africa, at the expense of an additional 10 days per trip. The Panama Canal also remains problematic with extremely low water levels that limit the number and size of ships. Fortunately, the rainy season is approaching and some shippers are beginning to reintroduce service.
Mere hours after our last #MacroMemo, a further supply chain complication arose in the form of a tragic accident in Baltimore. A large ship collided with a bridge, destroying the bridge and resulting in the loss of several lives. The city’s port is now obstructed. While only ranked 20th overall among U.S. ports, it normally handles the most cars and light trucks of any U.S. port. It is also a major transportation hub for exporting U.S. coal. Overall, the port transported US$80 billion of value in 2023.
The U.S. Army Corps of Engineers indicates that some shipping traffic will become possible by the end of April. However, further normalization will take additional weeks as the bridge debris is removed. As such, one might guess that approximately US$10—15 billion of goods won’t be transported by the port, though the value-added that would normally have been generated by the port would be considerably less. Many goods will presumably transit via other ports in the meantime.
The bottom line is that the overall economic impact should be small outside of a handful of specific sectors.
Do U.S. companies like higher rates?
It is well documented that the U.S. economy is less rate-sensitive than it used to be, and relative to many other developed countries. One reason for this is that the U.S. corporate sector holds a great deal of cash and other liquid assets that earn interest. When interest rates rise, businesses earn more money on these assets.
Some have gone so far as to argue that U.S. businesses are net beneficiaries as interest rates rise – that higher rates deliver more profits on their assets than these businesses pay in additional debt-servicing costs.
But our quick analysis shows this not to be true. U.S. firms may have a lot of cash (US$4.0T), but they have over three times more debt (US$13.6T) (see next chart).
U.S. firms have a lot of cash, but still prefer lower rates
As of 10/01/2023. Sources: Federal Reserve, U.S. Bureau of Economic Analysis (BEA), Macrobond, RBC GAM
That doesn’t quite prove that companies suffer financial losses when interest rates are higher since the rate they earn on mostly short-term money market-type securities can vary from what they pay on their frequently longer-term corporate debt. Normally the rate they receive is lower than the rate they pay. But when the yield curve is inverted, they can temporarily earn more per dollar of invested assets than they pay per dollar of debt. That is actually the case today (see next chart). But the gap between the two is not nearly large enough to compensate for the fact that the companies have 3.4 times more debt than liquid assets.
Interest rate on corporate cash holdings exceeds the interest rate on debt
As of 03/13/24. Sources: Federal Reserve, U.S. Bureau of Economic Analysis (BEA), Macrobond, RBC GAM
It is also notable that corporate cash is not distributed evenly across companies. A handful of companies account for nearly half of the total. This means that the bulk of the U.S. corporate sector is benefiting much less from higher interest rates. Furthermore, even if individual corporations profit from higher rates, the fact that the broader economy is theoretically weaker and corporate valuations are reduced means that the net effect upon them is also likely negative.
The bottom line is that rising interest rates are not secretly providing economic stimulus to the U.S. corporate sector.
Who rules the global economic roost?
We’ve written before about which countries appear set to dominate global growth over the coming years. These are the countries likely to contribute most to the expansion of the global economy (see next chart).
China is set to lead, contributing a whopping 25% to global growth over the next five years according to forecasts from the International Monetary Fund (IMF). While this is gigantic, note that it is considerably less than the approximately one-third contribution that China generated over the past decade.
India is set to zoom into second place, with 16% of the total.
The U.S. slips to third, with 9.5% of the total.
Indonesia rounds out the top four.
Overall, emerging-market economies make up more than 80% of the total anticipated growth in the global economy.
China to remain the top driver of world growth
Based on International Monetary Fund forecast from 2023 to 2028. Sources: IMF World Economic Outlook, October 2023, Macrobond, RBC GAM
That is probably the most exciting way to rank countries’ economies. But it isn’t the only useful perspective.
It is also quite valuable to get a sense for which economies are simply the biggest. That tells us which economies are churning out corporate profits, which countries have the greatest geopolitical clout, and so on. By this measure, and using market-based exchange rates, here’s what we find:
The U.S. is still on top, with a 26% share of global economic output (see next chart).
China is in second, with 17%.
Germany recently passed Japan for third place, with 4.2%, followed by Japan with 4.0% and India with 3.6%.
The U.K., which was only 18th in terms of the country’s expected contribution to growth, comfortably claims sixth place as a share of global output.
Canada, which wasn’t even in the first chart (hidden off the page in 27th place), comes a more reassuring 10th in the second chart.
Countries by share of world GDP show U.S. on top
Based on International Monetary Fund forecast for 2023. Sources: IMF World Economic Outlook, Oct 2023, Macrobond, RBC GAM
Note that there is a third way to measure economic clout. We have shown it in the form of horizontal gold dashes on the second of these two charts. This is the national share of global economic output calculated using purchasing power parity rather than market exchange rates. The idea is to capture the number of things each country makes rather than the amount of money it makes off them.
In a nutshell, emerging-market countries tend to be underweighted using market exchange rates because they sell products more cheaply. With this boost, China jumps into the lead (19% global share, versus 15% for the U.S.), with India in third. If it feels like we are cheating by de-emphasizing this approach, it is partially because you have to handle the data to somehow make comparable the number of computer chips produced by Taiwan versus the number of phones made in China, versus the number of movies made in the U.S., versus the number of barrels of oil produced in Canada.
A further reason is that our clientele are investors who ultimately care more about the money each economy makes than the number of widgets they produce.
Tricky inflation
The inflation environment remains tricky. To be sure, inflation is still declining more often than not. The Eurozone just recorded a particularly welcome decline in its Consumer Price Index (CPI) index to +2.6% year-over-year (YoY). Canada’s CPI print also edged a bit lower recently, to +2.8% YoY.
But it is far from a smooth path down to 2.0% inflation targets from here.
Short-term upside risks include the possibility that the price of oil rises even further in a Middle Eastern context as Iran weighs whether to respond to an alleged Israeli strike on an Iranian diplomatic building in Syria (see next chart). Shipping routes have their own problems, as discussed earlier.
Crude oil prices climb as geopolitical tensions intensify
As of 04/05/2024. Sources: Macrobond, RBC GAM
Inflation expectations have mostly descended off their peak but are still mostly consistent with inflation getting stuck in the realm of a half percentage point higher than normal (see next chart).
U.S. inflation expectations are still high relative to normal
Market-based expectations as of 04/05/2024, survey-based consumer and business expectations as of March 2024. Deviation from historical average from 1999 to 2019. Source: Federal Reserve Bank of Atlanta, Federal Reserve Board, University of Michigan Surveys of Consumers, Macrobond, RBC GAM
But the biggest issue is that the resilience of developed-world economies makes it harder for wage growth and corporate pricing to ease, pointing to a bumpier and slower path downward for inflation from here. Wage growth has slowed and is expected to slow further. but it remains much faster than before the pandemic (see next chart). Corporate pricing plans have similarly declined, but then began to rise again as the economy held firm (see subsequent chart).
Wage pressure in U.S. has eased
Atlanta Fed Wage Growth Tracker as of Feb 2024, wage expectations as of Mar 2024. Wage Pressure Composite constructed using business intentions to raise wages. Shaded area represents recession. Sources: Macrobond, RBC GAM
Fraction of U.S. businesses planning to raise prices
As of Feb 2024. Shaded area represents recession. Sources: National Federation of Independent Business Small Business Economic Survey, Macrobond, RBC GAM
Much of the excess inflation that remains in the economy can be linked to shelter costs. Given the lags involved, it is reasonable to expect some further decline in shelter inflation in the coming months. But the outlook is becoming murkier now that the U.S. housing market is staging a tentative revival and market rents begin to rise more quickly again (see next chart).
Rent inflation may struggle to improve in near term
As of Feb 2024. Zillow Observed Rent Index includes rent prices for single-family and multi-family structures and leads by 12 months. Sources: U.S. Census Bureau, Zillow, Haver Analytics, Macrobond, RBC GAM
Looking forward, U.S. CPI for March will be released on Wednesday April 10. The expectation is for a slight deceleration in the monthly rate of increase relative to the prior month. However, base effects should make the annual headline index look slightly worse. We flag upside risks.
Chinese deflation vanishes
For all of the legitimate concern about the Chinese economy, we were always dubious that China would get stuck in deflation. The country’s latest inflation reading shows a sprightly bounce back into positive territory (see next chart). It makes complete sense that inflation should remain low given an underperforming economy, but we don’t believe China is cursed to suffer the deflationary purgatory that Japan did for several decades.
Deflationary pressure in China relents with an update in Consumer Price Index
As of Feb 2024. Sources: China National Bureau of Statistics, Macrobond, RBC GAM
CPI overshoot
It is a bit early to provide a final judgement on how much higher U.S. consumer prices are than they would otherwise have been absent the recent spike, given that inflation has not yet actually returned to its 2.0% target. But it is still useful to get a sense for where things currently stand.
The U.S. price index is now 11% higher than what a trend 2.0% rate would have delivered since the beginning of 2020 (see next chart). This is quite a miss, representing the equivalent of an additional five years of normal inflation. This means that investors in a long-term nominal bond purchased before the inflation spike would earn an 11% lower real return than otherwise. Those who made stock market gains over the past several years should recognize this erosion to those gains. You will pay tax on the nominal gains.
Price level has deviated from normal trend
As of Feb 2024. Data indexed to January 2018 Consumer Price Index. Sources: Macrobond, RBC GAM
Central banks, of course, do not target the price level. They target the rate of inflation. Bygones are thus bygones. There will be no effort to unwind the 11 percentage-point gap.
While it is tempting to argue that central banks should try to get us back to the earlier price trajectory, the reality of squeezing 11 percentage points of inflation out of the system makes it unpalatable. Barring a sudden change in how price expectations are set in the economy, you’d need something approaching a Great Depression to achieve that kind of deflation. The additional danger with deflation is you can get stuck there as purchases are deferred indefinitely, making it difficult to return to normal economic conditions later.
Central banks still on pause
With economies strengthening and inflation proving somewhat sticky, bond yields have been rising again (see next chart). This threatens to incrementally slow the rate of economic growth, but more to the point, reflects reduced confidence in rate cuts ahead.
Bond yields fell on rate cut bets, but rising again on strong economic data
As of 04/05/2024. Shaded area represents recession. Sources: U.S. Treasury, Macrobond, RBC GAM
The market now prices in just two and a half rate cuts for the U.S. by the end of 2024. At the beginning of the year, the market had priced in nearly six. The new pricing seems about right, all things considered.
A side-effect of all of this is that good economic news is no longer reliably good for financial markets. The bond market and stock market both worry about what it means for inflation and policy rates. We appear to be very much in a world in which mediocre economic activity is good, while good and bad economic activity may both be bad for financial markets.
Bank of Canada preview
The Bank of Canada’s next rate decision is on Wednesday April 10. This looks very likely to result in an unchanged policy rate. The big question is when rate cuts might begin.
To the extent the Bank of Canada hasn’t even formally signaled an easing bias yet, recent economic indicators have been pretty solid and inflation still isn’t reliably below the upper band of the Bank’s 1—3% target range. With rent inflation particularly worrying, it seems unlikely that the Bank will be in a rush to cut rates at its June meeting. July is the better bet at this juncture, and it isn’t impossible that the Bank of Canada takes even longer to get going. That said, the Bank could take an incremental step at this meeting by acknowledging an easing bias.
The meeting will also include a fresh Monetary Policy Report. Growth has been somewhat stronger than expected so far, and so a small upgrade is likely forthcoming.
Canadian business bankruptcies
Canadian business bankruptcies have exploded higher in recent months, more than doubling since last summer (see next chart). Certainly, economic conditions are part of the story. The Canadian economy has been anemic. Some businesses have struggled with rising input costs and costly labour. Rising interest rates have been painful for indebted companies.
Business bankruptcies in Canada rising quickly
As of Jan 2024. Shaded area represents recession. Sources: Haver Analytics, RBC GAM
But this isn’t the full story, as there are also some special factors at work.
Business bankruptcies are rebounding from abnormally low levels. They were extremely depressed after the pandemic due to generous government support. They were also unusually low across the entirety of the 2010s – due presumably to the lengthy economic expansion paired with low borrowing costs. Some – though clearly not all – of the recent rebound is a return to a more typical bankruptcy rate. While bad news, the new bankruptcy rate isn’t actually all that different than the last time interest rates were this high.
There is arguably a catch-up effect involved. A certain fraction of the businesses that would naturally have failed in the normal course of business over the years 2020—2022 (even without a pandemic) didn’t, due to government supports and distorted demand. Some of these businesses are failing now. Reflecting this, the bankruptcies are disproportionately in volatile sectors like accommodations and food services, retail and construction. But again, that can hardly explain the entirety of the giant leap in recent months.
Providing the best explanation for why the recent increase has been so sharp, Canadian businesses had to repay special pandemic-era government loans starting in 2023. These loans were due by January 18, 2024. Quite a number of small businesses have presumably failed to do so, and so have declared bankruptcy. One would imagine this should be a one-time shock, with the bankruptcy rate reversing somewhat later.
More generally, Canada’s business bankruptcy numbers have not proven very useful for anticipating or even identifying the state of the broader economy over the years. Bankruptcies failed to spike during any of the last three recessions in Canada, nor during the near-miss recession of 2001-2003. So it would actually be out of keeping with the normal trend if rising bankruptcies signaled a recession this time.
In conclusion, the recent spike probably does not signal that the economy is suddenly convulsing downward. Supporting this view, the latest Business Outlook Survey and the Real-time Local Business Conditions Index both argue that the Canadian business sector is largely trundling forward as usual.
Canadian budget coming soon
Briefly, Canada’s federal budget approaches on April 16. The date has slipped steadily over the years, with the proposed budget now occurring more than two weeks past the start of the very fiscal year that it purports to fund. It is a strange situation, though the U.S. just went six months into its fiscal year before actually passing a proper budget.
The Parliamentary Budget Office projects that the deficit will approximately double, and that’s before factoring in new commitments. The budget’s focus may include additional pharmacare spending, more military spending, a variety of housing programs, a plan to build the country’s artificial intelligence capacity, and a national school nutrition program. Fortunately, in comparison to many countries, Canada’s fiscal deficit as a share of GDP should still be fairly small.
-With contributions from Vivien Lee, Vanita Maharaj and Aaron Ma
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