Transcript of the chat session An overview of recent macroeconomic developments in Canada, which occurred on Thursday, November 13, 2014 from 1:30 to 2:30 p.m. EST

Note: This was a bilingual chat session, which means that the participants were able to submit their questions in English or French. Statistics Canada respects the Official Languages Act and is committed to ensuring that information products of equal quality are available in both English and French. For that reason, all the questions and answers have been translated in the other official language.

 Moderator at 13:30:00
Welcome everyone! This is a bilingual chat session, which means that you can submit your questions in English or French. Our experts will respond in a timely manner and in the official language in which the question was asked.

 tanyaf at 13:30:00
Given the low level of literacy, numeracy and problem-solving skills in technological environments, is there reason to be concerned with this observation for Canada? Since these skills are vital in the workplace, especially in management, could there be a link with one of Canada's macroeconomic aspects? (employee performance, productivity, standard of living, or other)

 Moderator at 13:37:55
tanyaf, thank you for your question. Unfortunately, this question is not related to the topic of this chat session. We will answer your question by email in the next few working days.

 Bolornar at 13:33:00
Which economic sector contributes most to the economic growth so far and by the end of this year? and what is/could be the main driver of the real growth for this year?

 Guy Gellatly at 13:52:19
The monthly GDP by industry release provides a graphical breakdown of the percentage point contribution to aggregate GDP growth that comes from different industrial sectors, and that will give you a good sense of the current movements. The industry contributions to growth in the second quarter were fairly broad-based, coming from both industrial production (namely mining, oil and gas, and manufacturing) as well as many services, such as wholesale and retail. During the summer months, GDP growth slowed on lower industrial production (mining, oil and gas were down in July in August, and manufacturing in August).

 rfitzpatrick at 13:36:00
What explains the persistently high unemployment rate in Newfoundland and Labrador?

 Cyndi Bloskie at 13:58:30
Newfoundland and Labrador has the highest unemployment rate in the country, currently at 12%. This is more than double the national rate of 6.5% in October, but has declined in recent months from 13.5%. The province has the lowest participation rate at 60.5% versus 66% at the national level. Please see the attached link to the CANSIM database for detailed labour force data by province and industry.

 robertchisholmu... at 13:30:00
A March 2007 newspaper article about Ivan Fellegi reported the following: "One tradition that the chief statistician does cling to is the agency's practice of listening carefully to what government and industry clients say they need, while scrupulously maintaining its independence." Several questions arise from this:- (1) Who were and who are the "government and industry clients" referred to, with reference to information collection and reporting about unemployment and underemployment? (2) Who was and who is responsible for deciding the criteria for labelling some people out of work as having "given up looking for work", "dropped out of the labour force" and "discouraged workers"? (3) There was no apparent provision at the time for other groups such as organised labour, the general public, and organisations such as OSPE and Vitesse Re-Skilling to provide input about this, on any organised and regular basis. What in fact was the situation in 2007, and did it change at all prior to today? (4) Nobody seems to me to have recognised the possibility of everybody - the general public, politicians, business leaders, employers etc. - getting completely the wrong ideas and adopting pejorative / mis-informed attitudes towards people out of work who are referred to in mainstream mass media reports as having "given up looking for work" or "dropped out of the labour force". How would you respond to this? (5) It appears to me that Employable Social Assistance Recipients are also "lumped in" with the rest of the group classified as "Not in the Labour Force", and not counted as unemployed or needing jobs. I don't recall ever seeing Employable Social Assistance Recipients referred to in any mainstream mass media reports originating from Statistics Canada. What can you tell us about this? (6) On account of the above problem areas - which as far as I can see have been going un-noticed and un-resolved for decades - it appears to me that nobody really has any clear idea of the numbers of satisfactory jobs actually needed to fully employ everybody who wants to work. Yet good knowledge of this, for obvious reasons, is essential to enabling any government to manage the economy properly. How would you respond to this? (7) How come that everybody seems to have forgotten or ignored the existence and lessons of the 1992 report, "Survey of Persons Not in the Labour Force", and more recent ones such as the "Ottawa's Hidden Workforce" report of Fall 1998? Anything you can tell us right now in response to the above would be a good start; I also think that people might like to see some more detailed responses later. Robert T. Chisholm - Associate Member, OSPE

 Moderator at 13:59:23
Hello robertchisholmukengineer,
Thank you for your question. Unfortunately it is not focused on the topic discussed today. We will transmit your question to an expert in the area responsible for labour statistics who will get back to you by email over the next few days. Thank you.

 christopheralexander at 13:44:00
Does massive injection of cash for short term projects at the onset of a recession/depression prolong the recovery?

 Moderator at 14:05:01
Hi christopheralexander,
Thank you for your question. Unfortunately, that subject is outside of the experts' area of expertise. We will follow up with you by email in the following business days.

 Sanaro01 at 13:57:00
Would you say that the "dynamics" we are seeing in 2014 would represent the "new normal" for the Cdn. Economy post 2008-09 Recession?

 Cyndi Bloskie at 14:12:20
We cannot comment on whether this is a new 'normal' but based on the data from 2000 to 2007, average annual GDP growth was 2.8%. From 2010 to 2013, GDP growth averaged 2.4%. In the first quarter of 2014, growth slowed to 0.9%, but picked up in the second quarter to an annualized rate of 3.1%.

 Real estate investor at 13:31:00
How do think the massive money printing the Japanese central bank is doing will impact our economy?

 Moderator at 14:12:36
Hello Real estate investor, thank you for your question. Unfortunately, the topic is outside our experts' area of expertise. We will get back to you by email in a few days.

 moule at 14:10:00
Does Statistics Canada have any information about the trends in the participation rate?

 Cyndi Bloskie at 14:22:41
Yes, Statistics Canada publishes monthly data on labour force participation. For more information on labour force data please refer to CANSIM.

 jean.liu at 13:46:00
What the impact of the recent low oil price to our economy? Do you think this low price will last as the supply is growing while demand are declining for major economic growing areas, like China?

 Cyndi Bloskie at 14:24:01
From a statistical perspective, the lower price of crude translates into lower gasoline prices at the pump, which has a dampening effect on overall consumer and industrial prices. Lower oil prices also have an impact on export and import prices, which affects our terms of trade. However, the differential between the WCS and WTI has narrowed recently, which offsets some of the impact of the decline in overall prices. We cannot speculate on future events.

 Sgagnon at 14:14:00
Interested in finding out the answer to the question from Jean.liu if sent by email after the chat session

 Moderator at 14:25:38
Hello Sgagnon, certainly, we will send it to you!

 robertchisholmu... at 14:07:00
I'm sorry if my earlier questions caused an "overload" at your end! The point is to have answers either now or after the chat session - depending on what will work for you - and to have the answers, once finalised, posted in public for all to see.

 smfgovab at 14:01:00
What causes the dips in the summer months? I see this in inflation and in the previous answer in GDP growth.

 Guy Gellatly at 14:29:01
Most of the monthly or quarterly economic indicators published by Statistics Canada are reported in seasonally adjusted terms -- which removes the effect of seasonal or calendar effect in the data -- to allow for more meaningful month-to-month comparisons. If there are movements in the summer months that aren't seasonal, then these would be reflected in the month-to-month movements in the seasonally adjusted data. This doesn't necessarily just occur in the summer months. Recent Daily articles for manufacturing, trade and employment have noted the impact of unseasonal changes on monthly estimates. Here is a link to an FAQ on seasonal adjustment.

 moule at 14:08:00
How does seasonal adjustment affect the unemployment rate and participation rate?

 Cyndi Bloskie at 14:29:35
Seasonal adjustment eliminates the regular seasonal patterns in the data. For further information on seasonal adjustment check out Seasonally adjusted data – Frequently asked questions.

 David Gosse at 13:41:00
With the recession occurring at the precise moment when the first of Canada's baby-boomers were poised to enter retirement, what challenges do you foresee with the economic recovery and labour market given the decline of DB pension plans in Canada and the greater necessity on the part of citizens to participate in the third pillar of private savings?

 Guy Gellatly at 14:30:25
The impact of population aging on the labour market, and on employment creation, is certainly a development that garners a great deal of attention. I am not in a position to speculate on what the effects of aging will be going forward in terms of its implication for labour market trends. The October LFS release noted how the year-over-year growth in employment among workers aged 55 and over mirrors population growth among this group, and you can certainly get a good sense of the distributional effect of population aging on the composition of the labour force by looking at how the share of employment across age classes has been changing over time.
There is some analytical work on pension coverage and the transition to retirement that you can obtain from the research module on the Statistics Canada site.

 jean.liu at 14:11:00
On page 7 of the presentation, economic growth in Canada is compared with other major economies. What is the criteria of the major economies? I did not see big economies, like Russia, China, etc. in there. Why do we only compare to those five?

 Cyndi Bloskie at 14:36:24
This chart was intended to show economic growth across a sample of countries only, including industrialized, resource-based and developing economies.

 kbpollock at 14:06:00
I have been following the rate of profit -- pre-tax corporate profits divided by the stock of non-residential fixed capital -- for Canadian and US corporations. It's decline in the mid-to-late 2000s was a pretty good indicator of an impending recession. From its pre-recession peak in 2005 to its lowest point in 2009 the Canadian average rate of profit fell by 39.0 percent, the US rate fell from its 2006 peak by 71.4 percent. Today the US rate of profit is actually higher than it was at its 2006 peak but the Canadian rate of profit remains 20.3 percent lower than in 2005. Two questions: why do you suppose profits have failed to recover in Canada as they appear to have done in the US? Do you suppose that the current relatively-high US profit rate represents a peak before another recession or a sign of "recovery"? After all, from the trough to peak in the 2000s took 4-5 years; we're now five years out from 2009.

 Moderator at 14:37:08
Good afternoon kbpollock: We apologize, but the subject of your question is outside the area of expertise of our experts. We will follow up with you in the next few days.

 christopheralexander at 14:15:39
Real estate investor - I was thinking more of massive deficit spending, which historically seems to make things worse in the following years; especially the most recent one.
In the 'doing something different' vein, it seems to me that rather than racking up more debt we should just accept the short term sharp pain in order to recover faster.

 Real estate investor at 13:57:18
@jeanliu - if there is no manipulation, then slowing demand against a backdrop of increasing supply ultimately means low price. This is great for us, the consumer, not so much for the producers. Don't you want everything to get cheaper. TV's have been getting cheaper for years. I don't hear anyone complaining.

 Real estate investor at 13:52:54
Christopher Alexander - it depends on where the cash is coming from. If it is from central bank money printing, it will temporarily improve the economic outlook but ultimately it will make the next correction worst. See US for a great example of injection not working.

 marina.savchenko at 14:26:00
So many good questions! Thank you everybody. I guess many of them are difficult to answer, but we all are craving for answers.

 Moderator at 14:44:18
Thank you marina.savchenko!

 robertchisholmu... at 14:25:00
While I can see that my earlier questions might partly lie outside the scope of the topic, it is possible to have proper discussion about how the economy has been performing since 2008 / 2009 only if we at least attempt to address my initial set of questions. There are some very big and very serious questions involved there, and they merit serious answers.

 Moderator at 14:45:01
Hello robertchisholmukengineer: as indicated earlier, we will get back to you by email in the next few days. Thank you again for participating.

 logocentric at 14:11:00
Are you concerned that manufacturing hasn't reached 2007 levels? Or is it the case that it is gradually moving into higher value-added sectors, such as aerospace etc, CNC machinist jobs are becoming more available for youth. Is this a good sign. Or would you still suggest that youth stay away from manufacturing and stick to let's say the construction industry?

 Guy Gellatly at 14:50:51
Monthly manufacturing sales returned to their July 2008 level with the release of the July 2014 reference month, followed by offsetting movements in August and September. There is a great deal of interest in how the sector has adapted in both the pre- and post-recession period. There is research available on our site that has examined the changing dynamics of the Canadian economy.

 amartin4 at 14:13:00
Hello Ms. Bloskie and Mr. Gellatly, I've just finished reading your presentation. I found it very interested and it raises many questions. One of your conclusions is the growing gap between the economy and the labour market, represented in part by a decrease in the employability rate. Do you think this is due to deterioration of the labour market, or rather aging of the workforce? Thank you.

 Cyndi Bloskie at 14:57:53
Thank you very much for your interest. There was a decrease in the total employment rate after the recession. We see that the aging of the population is affecting the employment rate, as confirmed in the Labour Force Survey's Daily releases. The employment rate of persons 55 years and older is at a record high. For more labour force data, please consult the Labour force survey estimates (LFS), by sex and age group, seasonally adjusted and unadjusted.

 Moderator at 14:58:00
The chat session is now over. Thank you for your questions and comments! If our experts did not have a chance to respond to your question, we will follow up with you by email in the next few business days. The full transcript of this chat session will be made available on our website shortly. Have a great day!

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