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in si de ha lto n. co m O ak vi lle B ea ve r | T hu rs da y, J an ua ry 1 1, 20 18 | § 5 RBC Chief Economist gives 2018 economic outlook at Oakville Chamber breakfast NEWS Oakville Chamber photo Craig Wright, Senior Vice President and Chief Economist RBC Craig Wright provides financial forecast DAVID LEA dlea@oakvillebeaver.com Canadians have reason to be optimistic with eco­ nomic indicators pointing to Canada's economy con­ tinuing to grow in 2018. Royal Bank of Canada senior vice president and chief economist Craig Wright provided an eco­ nomic outlook for 2018 dur­ ing an Oakville Chamber of Commerce breakfast held Tuesday, Jan. 9. The event attracted ap­ proximately 250 local poli­ ticians and members of the Oakville business commu­ nity. Wright's forecast said Canada's gross domestic product (GDP) growth would slow in 2018, but still see an increase of 1.9 per cent. "Last year was a re­ markable year where we saw phenomenal gains well above our speed," said Wright. "Now as we go forward and we hit that speed limit, growth will tend to slow down especially in the en­ vironment of rising inter­ est rates." The forecast said gov­ ernment spending on in­ frastructure and a moder­ ate increase in business in­ vestment are expected to drive this 2018 growth. The year is not devoid of risks, said Craig pointing to the geopolitical uncer­ tainty that comes when the leaders of America and North Korea threaten each other with nuclear war. Exactly what is going to happen with North Ameri­ can Free Trade Agreement (NAFTA) is another area of concern. Wright noted that with 31 U.S. states calling Cana­ da their No. 1 trading part­ ner the economics of the situation argue for a tweaking of the agreement. That said the politics in­ volved appear to be leaning toward scraping the agree­ ment all together. If NAFTA is torn up, Wright said, the problem lies in the uncertainty of what kind of tariff regime will replace it. For the first quarter of the year, the Canadian dol­ lar is expected to weaken due to such factors as the uncertainty surrounding NAFTA. A rebound is expected with the Canadian dollar trading at between 75 U.S. cents and 80 U.S. cents for much of 2018. Wright said there was also good news on the job front noting 160,000 jobs were created in December and November. "The job market in Can­ ada has been remarkable," he said. "These are mostly full­ time jobs . The unemploy­ ment level in Canada is now the lowest it has been since 1976." In the area of housing, Wright said the market is cooling, but not collapsing. He said regulatory mea­ sures put in place in vari­ ous provinces, rising inter­ est rates and increasing mortgage rates are expec­ ted to continue to bring prices down in 2018. Wright had some criti­ cisms for the federal gov­ ernment's fiscal policies particularly when it comes to running deficits. While Canada's debt and deficit ratios are not at alarming levels, he noted, we are probably closer to the next recession than the last, and this is the time to get Canada's financial house in order and build reserves. Wright also said Cana­ da's competitiveness dropped in 2017, which he blamed on higher personal and corporate taxes and carbon pricing. "It is important carbon pricing is gradual, predict­ able and revenue neutral. Revenue neutral means if there is a cost you have to offset it somewhere else in terms of personal or corpo­ rate taxes," said Wright. "We have four provinces with carbon pricing initia­ tives and they all see it as a cash grab." ON NOW AT THE BRICK! SAVING YOU MORE For more details go instore or online ©thebrick.com. 3 3 5 0 F A I R V I E W S T R E E T , B U R L I N G T O N 9 0 5 - 6 3 4 - 7 7 0 0 • E M A I L : w b u l@ b e l ln e t .c a W E BRING PEOPLE & NATURE TOGETHER K-rt- diccr- .<!. I ' Selected Gifts, Garden and Christmas Items % Now Until Jan 15th - Selected Clearance Sales FINAL happy new 18 "■(MUCH t r o o u D W C M M n w since w i mailto:dlea@oakvillebeaver.com mailto:wbul@bellnet.ca RBC Chief Economist gives 2018 economic outlook at Oakville Chamber breakfast DAVID LEA