<\/p>\n
Sharing the largest international border in the world, few countries have had as close economic ties as Canada and the United States.<\/p>\n
America is Canada\u2019s largest export market, and Canada is one of the biggest sources of imports for the U.S., so in the past if their economy did well, so did ours.<\/p>\n
\u201cCanada\u2019s future, however, may depend less on its U.S. relations,\u201d wrote Paul Edelstein, a senior economist with Moody\u2019s Analytics in a recent report.<\/p>\n
Moody\u2019s charted the path of the two economies and discovered a growing gap that it predicts will only get wider.<\/p>\n
Canada and the United States grew at pretty much the same pace between 2010 and 2017. U.S. real gross domestic product<\/a> rose by 20 per cent during these years and Canada\u2019s grew by 18 per cent.<\/p>\n Recently, however, that pattern has shifted. Since 2022, U.S. cumulative growth of 6.7 per cent has overtaken Canada, where GDP rose just 3.6 per cent.<\/p>\n Edelstein said Donald Trump\u2019s trade war<\/a> has contributed to the widening gap. Facing steep sectoral tariffs from the United States, Canada\u2019s exports fell 27 per cent annualized in the second quarter, one of the worst quarters on record.<\/p>\n But the divergence predates Trump\u2019s tariffs, he said, and weak labour productivity<\/a> in Canada has been part of the problem. Since 2022, U.S. labour productivity has grown by 5.6 per cent, while it has fallen by 1.2 per cent in Canada.<\/p>\n Moody\u2019s forecast for the next five years \u2014 which is more pessimistic than those of Canada\u2019s big six banks \u2014 projects that the gap between the U.S. and Canadian economies will only grow bigger. It predicts Canada\u2019s real GDP growth will increase by just 0.9 per cent this year and 0.1 per cent in 2026, compared with growth of 1.9 per cent and 1.7 per cent in the United States.<\/p>\n Over the next five years it sees Canada\u2019s growth will averaging 1.5 per cent, compared with 2.2 per cent growth in the United States.<\/p>\n Moody\u2019s says Canada\u2019s prospects now depend on shifting away from an export-dependent model focused on the United States.<\/p>\n The Federal government appears to be moving in that direction with promises to increase spending on infrastructure and on expanding production capacity. Progress has been made on establishing new free trade agreements with countries in southeast Asia.<\/p>\n \u201cThese efforts, however, are likely to take time to produce results for the Canadian economy,\u201d said Edelstein.<\/p>\n \u00a0Sign up here<\/a> to get Posthaste delivered straight to your inbox.<\/p>\n \u00a0<\/p>\n Made in Canada has become important to Canadians during the trade war with the United States, but apparently there are limits.<\/p>\n The Bank of Canada\u2019s survey of consumer expectations<\/a> out Monday showed that Canadians are spending less on U.S. goods and holidays than they did before Donald Trump took power and spending more on goods made in Canada and staycations within the country.<\/p>\n However, prices are still a deciding factor for many,\u00a0 with three-quarters of survey respondents saying they are not willing to pay more than an additional 10 per cent for a Canadian product.<\/p>\n As one respondent put it: \u201cI\u2019m going more out of my way now to buy Canadian. I would say I am willing to pay more these days for products made in Canada. Not a substantial amount more. I\u2019d say 5\u201310 per cent more at the most.\u201d<\/p>\n Read more on the business outlook.\u00a0<\/a><\/p>\n Today\u2019s Data: Canada\u2019s inflation reading for September<\/p>\n Earnings: Netflix Inc., General Motors Co., Equifax Inc., Capital One Financial Group, Che Coca-Cola Co., General Electric Co.<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Garry Marr: Here\u2019s the real reason the Canadian dream of home ownership won\u2019t die any time soon<\/a><\/p>\n The number of Canadian companies expecting a recession is rising, Bank of Canada survey shows<\/a><\/p>\n Canada to launch national anti-fraud strategy and new agency to fight financial crime<\/a><\/p>\n Married nearly 30 years, Laurence, 58, and Sandra, 61, are officially empty nesters. Their two adult children are independent and building their careers and the couple are ready to fully embrace their next chapter \u2014 if they have saved enough. Another big question is when they should start taking Canada Pension Plan? Family Finance has some suggestions. Read on<\/a><\/p>\n Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at\u00a0wealth@postmedia.com<\/a>\u00a0with your contact info and the gist of your problem and we\u2019ll find some experts to help you out while writing a Family Finance story about it (we\u2019ll keep your name out of it, of course).<\/p>\n Want to learn more about mortgages? Mortgage strategist Robert McLister\u2019s Financial Post column <\/a>can help navigate the complex sector, from the latest trends to financing opportunities you won\u2019t want to miss. Plus check his mortgage rate page<\/a> for Canada\u2019s lowest national mortgage rates, updated daily.<\/p>\n Visit the Financial Post\u2019s YouTube channel<\/a> for interviews with Canada\u2019s leading experts in business, economics, housing, the energy sector and more.<\/p>\n Today\u2019s Posthaste was written by Pamela Heaven<\/a> with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.<\/p>\n Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at\u00a0posthaste@postmedia.com<\/a>.<\/p>\n Bookmark our website and support our journalism: Don\u2019t miss the business news you need to know \u2014 add\u00a0financialpost.com<\/a>\u00a0to your bookmarks and sign up for our newsletters here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Sharing the largest international border in the world, few countries have had as close economic ties as Canada…\n","protected":false},"author":2,"featured_media":240978,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[23,103,12,22931,3,132803,21,19,22,20,25,24],"class_list":["post-240977","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-states","tag-america","tag-canada","tag-donald-trump","tag-moodys-analytics","tag-news","tag-paul-edelstein","tag-united-states","tag-united-states-of-america","tag-unitedstates","tag-unitedstatesofamerica","tag-us","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/240977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=240977"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/240977\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/240978"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=240977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=240977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=240977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} <\/p>\n
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