Oil, TPP, and a changing of the guard in Ottawa highlight some of the Canadian economy and policy surprises from 2015.
With 2015 coming to a close, here’s a year-end listicle: some surprising (but not-entirely-unrelated) developments in the Canadian economy and public policy that I didn’t expect to happen this year.
7. The mandatory long-form census was reinstated in November and will thankfully return in 2016.
6. Oil is now trading around the mid-$30 range.
5. The Bank of Canada’s interest rate cut in January. At the time, few if any economists expected it — though in hindsight it seems totally reasonable.
4. Negotiations for the Trans-Pacific Partnership (TPP) wrapped up. Of course, it’s not yet ratified, and there are serious doubts that it’ll pass US congress in 2016, but last year it was hard to imagine this group of 12 countries might agree to new global trade rules. It looked like there might be a deal in July, but when negotiators arrived in Hawaii several big sticking points remained — even before Canada and Mexico reportedly learned that the US and Japan had reach their own side-deal on content rules for autos. At that point, it didn’t seem likely that a deal would get reached after a quick re-group in time for the fall. But alas, that’s what happened, and after several days of imminent announcements, the deal was finally announced in October.
3. The Canadian economy shrunk over in the first half of 2015. There’s still disagreement over whether this episode justifies being called a (category 1?) recession. We are all anxiously awaiting the judgement of CD Howe Institute’s business cycle council on this.
Personally, I think it was a “recession”, but it wasn’t something I had expected earlier in the year. In fact, in June, after the first quarter GDP data were released, I bet a ‘pessimistic’ Jim Stanford that we’d get positive growth in the second quarter. As more data came in, it became clearer that we were indeed headed for what Jim called an “election recession”.
— Stephen Tapp (@stephen_tapp) June 4, 2015
2. The only party whose platform showed budget deficits would win the federal election in October. I think it was a sensible policy, but I didn’t expect anyone to advocate this — or if they did, I thought that it would be very hard to counter the political pressure from the balanced budget position. Of course, I think that #3 (the recession), was a unique context that made deficits more politically palatable.
1. At a press conference on a quiet Sunday afternoon on the day of the Grey Cup in November…. Alberta announced a carbon tax to be implemented in 2017. This wasn’t something I would’ve believed if you told me that last year.
So here’s my quick list, let me know if you have others, and I’ll update this to include other surprising developments that I’ve overlooked.