Everyone knows the past few years have been tough.
A lot of countries are still bouncing back from the pandemic with its lasting effect still looming. As for Canada, the economy has held up relatively well, and the future is looking quite bright.
With that said, there are still a few things that must be mentioned to get a better look at the full picture.
Things include job availability, population growth, and the recent change in interest rates.
Throughout the rest of this post, you will learn more about the current state of Canada and what to expect moving forward for the economy.
As more baby boomers retire, there are more available jobs each day.
The recent pandemic also had a major impact on the number of lost jobs, so now even more positions must be filled. This is likely a good thing as more Canadians are getting back to work with additional roles being taken up.
More working citizens means more dollars spent (and saved) which will have a lasting impact on the future economic state of the country.
The employment rate has increased from September to October in 2022, which is a good sign that it will keep trending that way as the holidays come around.
Ideally, the more positions filled, the better.
Population growth goes hand in hand with job availability.
Given the low birth rate in Canada, it’s important that people come into the country. With more working citizens (and just more people in general) it means the flow of money can operate at a healthier rate, therefore improving the economy.
If you think about it, with more families, those children will, at some point, enter the workforce and begin to contribute themselves economically. Of course, this comes with the need for housing and, more specifically, affordable housing.
The Canadian department of immigration plans to admit around 1 million newcomers over the course of the next few years. If that ends up happening, a few things must fall in place for it to be a benefit to the economy.
Rising Interest Rates
Recently, the cost of borrowing money has increased (interest rates).
This impacts different people in different ways. For homebuyers, it means that it will become a bit more expensive to own a home or borrow money for one, which is the opposite of what’s wanted when new citizens are arriving.
Typically, it is desired to have more affordable housing for new residents.
For the savers, it is expected that the savings interest rates will go up with the borrowing rates. This improves the ability to save at a time when it costs more to borrow.
However, the banks are not obligated to increase the interest rates for savers.
The best way to prepare for higher rates in the future is to chip away at any debt and cut expenses. That will ensure that you’re able to be ready for either higher inflation or higher future rates. Either situation would benefit from a larger bank account.