Affordability in Canada’s housing markets is generally very good but interest rate increases could start to change that.

BMO’s Spring Housing Affordability Report also reveals the influence that Millennials have on the markets in Toronto and Vancouver, but also in those outside these hot markets as they seek more affordable options.

However, this influence is set to decline in the next decade, the report says, as the baby boomer homebuying era did in the late 90s.

“Millennial buyers and international migrants are cushioning the decline in detached home prices in the hottest markets,” said Sal Guatieri, Senior Economist, BMO Capital Markets. “We expect millennials to also bolster other markets like Montreal and Ottawa, as those looking for better affordability consider options beyond Toronto and Vancouver.”

He added that interest rates are likely to rise 50 points in this calendar year, with the additional costs eroding affordability in those markets that have not been affected by the tighter mortgage regulations and other cooling measures.

The Federal Open Market Committee (FOMC) met this week for the first time under the chairmanship of Jerome Powell. In a unanimous decision, the Committee hiked the target range for the federal funds rate by 25 basis points to 1-1/2 to 1-3/4 percent. Unlike the Bank of Canada, which has a single objective of targeting inflation at roughly 2 percent, the Fed has a dual statutory mandate to both foster price stability and maximum employment.
U.S. labour conditions remain strong, and the economy continues to grow at a moderate pace. Inflation is still below the Fed’s target despite the rapid decline in unemployment to 4.1 percent. The growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter pace.
In the Fed’s quarterly forecast of economic and financial conditions, policymakers were divided over the outlook for the benchmark interest rate in 2018. Seven officials projected at least four quarter-point hikes would be appropriate this year, while eight expected three or fewer increases to be warranted. This is in direct contrast to market expectations of only two rate hikes this year by the Bank of Canada and is one important reason why the Canadian dollar has fallen sharply vis-a-vis the U.S. dollar in recent weeks, although the loonie did edge upward following the release of the Fed’s decision as the U.S. dollar fell sharply.
In the forecasts, U.S. central bankers projected a median federal funds rate of 2.9 percent by the end of 2019, implying three rate increases next year, compared with two 2019 moves seen in the last round of forecasts in December. They saw the fed funds rate at 3.4 percent in 2020, up from 3.1 percent in December, according to the median estimate.
The median estimate for economic growth this year rose to 2.7 percent from 2.5 percent in December, signaling confidence in US consumers despite recent weakness in retail sales. The 2019 estimate rose to 2.4 percent from 2.1 percent. The 2020 GDP growth continues to be a forecasted 2.0%. Fed officials expect a lift this year and next owing to the tax cuts passed by Republicans in December.
These projections are above the Fed’s estimate for the long-run sustainable growth rate of the US economy of 1.8 percent, a figure that is about in line with the Bank of Canada’s analysis for our country. The tax cut stimulus was introduced to an economy that was already experiencing labour shortages. The Fed estimates the long-run noninflationary level of unemployment to be about 4.5 percent–well above today’s nearly 20-year low of 4.1 percent, suggesting that inflation is likely to rise in coming months.

Canada’s uninsured mortgage market reached an eight-year high in January as government steps to reduce taxpayer exposure to the housing market gain traction, according to data from the country’s banking regulator.

Mortgages that don’t require homeowner insurance surged 19 percent from a year ago, accounting for about 53 percent of the C$1.13 trillion ($864 billion) of home loans at Canada’s federally regulated banks, data from the Office of the Superintendent of Financial Institutions show. Insured home loans fell 6.5 percent from a year ago.

Uninsured mortgages have taken an increasing share of the nation’s housing loans since 2012 as the government moved to reduce the chances of the kind of taxpayer-funded bank bailouts that happened after the U.S. housing crash a decade ago.

Still, the slowdown of residential mortgage volumes continues, with banks posting a 5.3 percent increase from January 2017, down from a recent high of 6.6 percent in May, the data show. The trend reflects the sentiments of executives of Canada’s Big Six banks, who commented on a cooling mortgage market in recent weeks after reporting earnings results for the first quarter.

“The slowdown in mortgage growth has been evident since the middle of last year, reflecting the impact of prior policy measures, as well as three interest rate hikes by the Bank of Canada,” DBRS Ltd. said in a March 19 note.

In January, OSFI made it more difficult for those with more than a 20 percent down payment to qualify for loans. The measures, known as B-20 guidelines, requires borrowers to qualify at the greater of the Bank of Canada’s five-year benchmark rate or 2 percentage points higher than the offered mortgage rate. Prospective borrowers have increasingly been turning to alternative lenders to qualify.

“With new mortgage rules taking effect on January 1, home sales have showcased two straight months of declines,” Barclays Plc analyst John Aiken said in a March 16 note to clients. “While stronger home sales at the end of 2017 could still buoy mortgage growth in the second quarter, we anticipate new mortgage origination volume could be tested in the back half of the year.”

Data released today by the Canadian Real Estate Association (CREA) show a second consecutive dip in home sales across much of the country. Rising mortgage rates and tighter mortgage qualification rules have hit first-time homebuyers particularly hard, and activity was pulled-forward late last year in advance of the new OSFI rules.
Existing home sales dropped 6.5% nationally in February, deepening the decline that began in January. February’s sales figure posted the lowest monthly reading in nearly five years. Home purchases over the first two months of this year plunged 19.4%. Sales fell in almost three-quarters of all local markets, with out-sized declines in and around Greater Vancouver (GVA) and Greater Toronto (GTA).
On a year-over-year (y/y) basis, activity slumped 16.9% from the peak pace of early 2017 and hit a five-year low for any February. Sales activity last month was 7% below the 10-year February average.
Toronto existing home sales plunged nearly 35% compared to the record pace of February 2017. In the GVA sales fell 9% y/y–14.4% below the ten-year February sales average. A CREA official said that “momentum for home sales activity going into the second quarter is likely to be weighed down by housing market uncertainty in British Columbia, where the provincial budget introduced new housing policies toward the end of February.”
Judging from price trends detailed below, the decline in sales in both Toronto and Vancouver appears to be almost entirely in higher-end single-detached homes, as the mid-range of the market–mainly condo apartments and townhouses–remain active.
Ottawa and Montreal have held up better than most, with sales little changed from a year ago. Elsewhere, sales in Calgary and Edmonton were down from the prior month and modestly from a year ago. But, most metrics still point to a soft and relatively stable market, ignoring the OSFI-related swing.
On a month-over-month (m/m) basis, three-quarters of housing markets experienced a decline in sales with just two provinces, P.E.I. (+2.98%) and N.B. (+0.79%) posting gains. B.C. led the declines, down 12.7% m/m, with the GVA down 15.8% and Fraser Valley down 16.3%. Calgary (-8.6%), the GTA (-8.2%) and several Greater Golden Horseshoe markets including Hamilton (-12.1%) and Oakville (-8.8%) were also down sharply on the month.

New Listings
The number of newly listed homes recovered 8.1% in February following a plunge of more than 20% in January. Despite the monthly increase in February, CREA reported that new listings nationally were still lower than monthly levels recorded in every month last year except January and were 6.4% below the 10-year monthly average and 14.6% below the peak reached in December 2017.
New supply was up in about three-quarters of local markets. B.C.’s Lower Mainland, the GTA, Ottawa and Montreal led the monthly increase. Despite the monthly rise in new supply, these markets remain balanced or continue to favour sellers.
With sales down and new listings up in February, the national sales-to-new listings ratio eased to 55% compared to 63.7% in January. Based on a comparison of the sales-to-new listings ratio with its long-term average, almost three-quarters of all local markets were in balanced market territory in February 2018. There were 5.3 months of inventory on a national basis at the end of February 2018 – the highest level in two-and-a-half years and in line with the long-term average of 5.2 months.

Home Prices
On a national basis, the Aggregate Composite MLS Home Price Index (HPI) rose 6.9% y/y in February posting the 10th consecutive deceleration in y/y gains. This continued the trend that began last April when the province of Ontario announced its new housing measures that included a 15% tax on nonresident foreign homebuyers. The slowing y/y home price growth mainly reflects the trend for the Greater Golden Horseshoe. Prices in that region have stabilized or begun to show tentative signs of moving higher in recent months; however, year-over-year comparisons are likely to continue to deteriorate further due to rapid price gains posted one year ago.
Nationally, condo units continued to show the highest y/y price gains in February (+20.1%), followed by townhouse/row units (+11.8%), one-storey single family homes (+3.5%), and two-storey single family homes (+1%).
In the GTA, the Composite MLS HPI rose 3.2% y/y, which was driven by an 18.8% y/y rise in condo apartment prices and 7.5% growth in townhouse prices. Single-family detached home prices were down slightly compared to February 2017.
Benchmark home prices in February were up from year-ago levels in 10 of the 13 markets tracked by the MLS® HPI (see the table below). Composite benchmark home prices in the Lower Mainland of British Columbia continued to trend higher after having dipped briefly during the second half of 2016 (GVA: +16.9% y/y; Fraser Valley: +24.1% y/y). Benchmark home prices rose by about 14% y/y in Victoria and by roughly 20% elsewhere on Vancouver Island.
In the GTA, benchmark price gains have slowed considerably but remain 3.2% above year-ago levels. While home prices in Oakville-Milton are down slightly over the past year (-1.9%), the monthly price trends there have begun to show signs of stabilizing with some tentative upward movement in recent months.
Calgary benchmark home prices were flat (+0.1%) on a y/y basis, while prices in Regina and Saskatoon were down from last February (-4.8% y/y and -3.8% y/y, respectively).
Benchmark home prices rose by 7.7% y/y in Ottawa (led by an 8.9% increase in two-storey single-family home prices). Greater Montreal saw a 6.1% rise y/y (driven by an 8.8% increase in townhouse prices). Benchmark prices increased 5% in Greater Moncton (led by a 6.4% rise in one-storey single-family home prices).

Bottom Line
Housing markets continue to adjust to regulatory and government tightening as well as to higher mortgage rates. The speculative frenzy has cooled, and multiple bidding situations are no longer commonplace in Toronto and surrounding areas. Home prices in the detached single-family space will remain soft for some time, and residential markets are now balanced or favour buyers across the country. The hottest sector remains condos in Toronto and Vancouver where buyers are confronted with limited supply. Owing to the housing slowdown, a general slowing in the Canadian economy and significant trade uncertainty, the Bank of Canada will continue to be cautious.

As the Bank of Canada pointed out last week, household credit growth has slowed in recent months led by a slowdown in residential mortgage credit. Rising interest rates are a severe headwind for consumer spending, and tighter monetary policy could derail an already fragile economy. So don’t expect a Bank of Canada rate hike anytime soon.

Canada’s mountain of consumer debt is triggering multiple alarms about the threat to the country’s banks.

Moody’s Investors Service joined the Bank for International Settlements and S&P Global Ratings which have all warned in the last month that Canada’s banking system, dominated by five giants, is facing a growing threat of souring consumer loans amid rising interest rates. The country’s ratio of household debt to disposable income reached a record 171 percent in the third quarter of last year.

The proportion of uninsured mortgages has increased to 60 percent from 50 percent five years ago, including home equity lines of credit, amid government efforts to reduce taxpayer exposure, according to the report from Moody’s on Tuesday. Canada Mortgage and Housing Corp., a government agency, insurers the bulk of mortgages in Canada.

Almost half of outstanding mortgages, many of them on fixed-rate terms, will have an interest-rate reset within the year, increasing the strain on households’ debt-servicing capacity, Moody’s said.

Further aggravating the situation are auto loans which are getting offered at terms as long as 68 months, authors of the report said. With these long terms, the car’s value often drops below the amount of the loan before it’s paid off.

Yet it’s the unsecured credit-card portfolios that will be the first to feel the pinch as their repayment tends to have lower priority for financially strapped borrowers.

All of these consumer loans have so far performed well in Canada as the country boasts the lowest unemployment rate in four decades. The arrears rate is only 0.24 percent for residential mortgages — seven basis points below the 10-year average, while the auto-loan delinquency rate is only 1.5 percent, Moody’s said. Canadian banks have also earned a reputation of being well-managed, conservative institutions after passing through the global financial crisis relatively unscathed.

The warning from Moody’s comes after the Bank for International Settlements placed Canada among the economies most at risk of a banking crisis, alongside Hong Kong and China. S&P Global Ratings last month lowered a key risk metric for Canadian banks after evidence of mortgage fraud.

The Bank of Canada held interest rates steady this month after increasing them three times since the middle of 2017. The central bank said it continues to monitor the economy’s sensitivity to higher rates.

Statistics Canada announced this morning that Canada’s jobless rate returned to a four-decade low as job growth rebounded, confirming that the jobs market is at or near full-employment. Canada added 15,400 net new jobs last month as the unemployment rate edged downward to 5.8%, its lowest level in records back to 1976. This follows January’s 88,000 job loss. However, the gains reflected a rise in part-time employment, which was up 54,700. Full-time jobs were down by 39,300, a reversal in the January performance and the first time in five months that full-time employment has fallen. Full-time positions have been responsible for most of the boom in jobs in the past year and a half, jumping by nearly 500,000 net new ones over that period.

Wage growth decelerated to 3.1% in February, after hitting 3.3% a month earlier, its fastest pace since 2015. Salary gains were boosted last month by the Ontario hike in minimum wages.

Ontario recorded the most substantial monthly drop in employment in January (down 50,900) on the heels of the wage hike. The province led job growth in February but made up only a small part of January’s loss with only 15,700 net new jobs. Employment was also up in New Brunswick and Nova Scotia, while it decreased in Saskatchewan and was little changed in B.C. Of note, Alberta’s unemployment rate fell to 6.7%, a 1.5 percentage point decline over the past year, as the provincial participation rate fell slightly in February.

The bulk of the gains were in the public sector (+50,300), while the private sector added 8,400 net jobs. Holding back the overall pace of gains was a decline in self-employment, down 43,300 in February after four months of net increases.

The gain last month was driven by services-producing industries, particularly health care and education. Manufacturing recorded a loss of 16,500 workers during the month. The number of people working in natural resources rose 7,600 in February, bringing the year-over-year employment growth to 3.4%. Employment in this industry has been trending higher since the second half of 2016.

The finance, insurance, real estate, rental and leasing industry–heavily impacted by the slowdown in housing–experienced a drop in employment of 12,000 last month, posting no growth on a year-over-year basis.

Today’s employment release is consistent with Canadian growth of roughly 2.0%. The February net gain of 15,400 is probably about what we can expect on average this year as the economy bumps up against full capacity. At 3.1% in February, wage growth posted a fourth consecutive month above its longer-term average of 2.6%. This will not set off inflation warnings at the central bank as the Bank of Canada reported this week that it still assesses wage growth to be below what is normal in an economy without labour market slack. This suggests the Bank will maintain its cautious stance.

U.S. Jobs Strong As Wage Gains Slow

U.S. nonfarm payrolls surged 313,000 in February compared to an expectation of a 200,000 net gain. Gains were mainly in the private sector and upward revisions to the prior two months added another 54,000 jobs. The jobless rate held at 4.1%–the fifth straight month at that level–as increased numbers of new workers entered the labour force. Rising labour force participation rates–reflecting the reentry of discouraged workers–might be one factor holding down wage gains.

Wage growth, which rose a moderate 0.2% month-over-month in February, dipped on a year-over-year basis to 2.6% from a level of 2.8% the prior month. Still, wages have risen at a 3.0% annualized pace over the past three months. The sharp pay gains spooked the markets last month but are apparently not yet taking hold.

Today’s jobs release signals the U.S. labour market remains strong and will keep driving economic growth, while the wage figures show some cooling from a pace that spurred financial turbulence last month on concern that the Federal Reserve could raise interest rates faster. The unemployment rate remains well below Fed estimates of levels sustainable in the long run.

The new Federal Reserve Chairman Jerome Powell will debut at his first Federal Open Market Committee Meeting March 20-21. The question market participants are mulling over is whether central bank officials will hold to projections of a total of three rate hikes this year, or boost the outlook to four.

President Donald Trump has said the tax-cut legislation he signed in December would spur economic growth and boost jobs and wages. At the same time, his tariffs on steel and aluminum imports may become a headwind depending on how extensively they’re implemented and how other nations retaliate. Canada can breathe a sigh of relief for now as Trump made a last-minute turnabout to exempt US NAFTA partners from the tariffs. The president struck an unusually optimistic tone on the fate of NAFTA but repeated his threat to quit the pact if the talks fall short.

“Today is a step forward,” Chrystia Freeland, Canada’s foreign minister, told Bloomberg News in Toronto Thursday. She said Canada would push “until the prospect of these duties is fully and permanently lifted,” and said it would be inconceivable to apply tariffs to a close military ally like Canada on national security grounds.

The impact of the tightened mortgage rules introduced at the start of the year appears to be rising.

A report from RBC Economics says that softening sales in February, following a slowdown in January, suggest a trend that is being felt across the country.

Highlighting data from local real estate boards, RBC says that price trends appear to be holding up, but that sellers are facing a weakened bargaining position.

The decline in Toronto (almost 35% year-over-year) in March translates, on a seasonally-adjusted basis, to a rough calculation of an 8-year low according to RBC.

There are some bright notes in RBC’s analysis though with an uptick in listings in February which it says could suggest increased move-up buyer activity in the coming months.

In conclusion, the report says that the B20 mortgage rule changes appear to have shifted homebuying decisions forward into 2017 with a corresponding dip at the start of 2018.

It forecasts that the impact of the new tightened rules will gradually ease in the coming months.

The Bank of Canada kept its key interest rate target on hold as it pointed to a climate of broadening, important unknowns around trade.

In explaining its decision to maintain its benchmark rate at 1.25 per cent, the central bank notes that recent trade policy developments are a key source of uncertainty for the Canadian and global outlooks.

U.S. President Donald Trump recently added threats of steel and aluminum tariffs to an already uncertain context for Canada that includes concerns over NAFTA’s renegotiation and competitiveness following tax-cut announcements south of the border.

The Bank of Canada notes fourth-quarter growth was weaker than expected, largely due to higher imports, and that it’s still assessing impacts on housing markets from new policies, including mortgage rules.

But it says global growth continues to be solid and broad-based, the economy is running near capacity, inflation is close to target and wage growth has improved, although still remains below where many expect it should be.

Governor Stephen Poloz was widely expected to hold off moving the rate because of weaker economic numbers in recent weeks and the expanding trade uncertainty.

Poloz has introduced three rate hikes since last summer, including an increase in January. The moves came in response to an impressive economic run for Canada that began in late 2016.

In the statement Wednesday, the bank reiterated it expects more hikes to be necessary over time, but that the governing council will remain cautious when considering future decisions.

They will continue to be guided by incoming data, such as the economy’s sensitivity to higher rates, the evolution of economic capacity and changes to wage growth and inflation, it said.

Canada’s economy decelerated more than expected in the second half of last year, amid signs indebted households have begun slowing down spending.

The economy grew at an annualized pace of 1.7 percent in the fourth quarter, Statistics Canada reported Friday, versus economist expectations for 2 percent growth. Third-quarter gross domestic product growth was also revised down.

After leading the Group of Seven in growth last year, Friday’s numbers show a Canadian economy that has lost momentum, seemingly hampered by longstanding productivity issues and the growing potential of a hangover from the real estate boom. The U.S. economy recorded growth rates of 3.2 percent in the third quarter and 2.5 percent in the last three months of 2017. Canada hasn’t trailed the U.S. in growth to this extent since early 2015.

“While most forecasters expect the pace of growth to be slower in 2018, we still believe that there’s a growing risk of the economy stumbling badly,” said David Madani, senior Canada economist at Capital Economics, in a note to investors.

At Potential

And the data not only show the slowdown is underway, which was expected, but an economy that isn’t even growing above its so-called potential growth level.

That’s a surprise since most economists were expecting Canadian growth would continue to run slightly above its noninflationary speed limit for at least another year, leading to price pressures that would prompt the Bank of Canada to keep lifting interest rates.

“With trade uncertainties mounting and inflation still reasonably well behaved, this gives the Bank of Canada plenty of leeway to stay cautious,” Doug Porter, chief economist at Bank of Montreal, said in a note to investors. “We continue to expect the Bank to move to the sidelines until the second half of this year.”

The Canadian dollar is tied with the Mexican peso as the worst performing major currencies over the past month, and is one of the worst performing over the past six months. The dollar was little changed after the GDP report, after falling as low as 0.4 percent earlier in the day.

Housing

What may be worse is that fourth-quarter GDP figures were exaggerated by temporary factors in housing. Spending on residential structures surged in the last three months of 2017 to an annualized 13.4 percent, the strongest quarterly increase since 2012. The gain was led by stronger-than-expected new home construction, and as buyers rushed to get ahead of tighter mortgage qualification rules that came into effect Jan. 1.

The increase in residential spending was responsible for 1 percentage point of the 1.7 percent growth rate, Statistics Canada said. Residential investment had been a drag on growth the previous two quarters.

The second-half slowdown was driven in large part by household spending, with consumption growth in the fourth quarter at the slowest pace since 2016. That was due in part to a higher saving rate, which increased to 4.2 percent in the fourth quarter, from 4 percent in the third quarter.

Statistics Canada did revise up growth estimates for the first half of the year to 4.2 percent, from an initially reported 4 percent.

One positive was non-residential business investment accelerating in the fourth quarter, up 8.2 percent on an annualized basis. Combined with the stronger residential spending, that helped to keep domestic demand growth at a relatively strong 3.9 percent clip in the fourth quarter, unchanged from the third quarter.

While exports recovered at the end of the year after plunging in the third quarter, that still wasn’t enough to keep the trade sector from being a drag on growth as imports increased at more than twice the pace.

Other Highlights of GDP Report

Statistics Canada reported GDP for the month of December rose 0.1 percent, in line with analyst expectations Monthly GDP was also driven higher by the housing market gains, which helped offset a drop in construction and manufacturing GDP expanded by 3.0 percent last year, the fastest pace since 2011 GDP growth was revised down in the third quarter to 1.5 percent, from an initially estimated 1.7 percent Exports recovered in the fourth quarter, with an annualized 3 percent gain. Imports were up 6.3 percent Businesses continued to add inventories in the fourth quarter, but less than they did in the third quarter. The drop in inventory accumulation reduced growth by 0.7 percentage points.

Patting himself on the back, the Finance Minister opened his speech by reminding us that “a little over two years ago…Canadians had the opportunity to stay the course. They could stick with a Government that favoured cuts and a set of failed policies that produced stubborn unemployment and the worst decade of economic growth since the depths of the Great Depression.” This, of course, was Stephen Harper’s Conservative Government. Never mind that the global financial crisis caused the recession, not the “failed policies” of the previous government. Throughout the budget documents, the message is that austerity was “needless” or “excessive.” Instead, Canadians chose, “a more confident and more ambitious approach…that gave Canadians the tools they needed to succeed. Starting with raising taxes on the wealthiest, so we could lower them for the middle class.”

The Liberals have forgotten their promise to run deficits no larger than $10 billion and to balance the budget by 2019. Instead, they now see sound fiscal management as a declining debt-to-GDP ratio—never mind that double-digit deficits remain as far as the eye can see—to a stunning $12.3 billion deficit at the end of the forecast horizon in fiscal year (FY) 2022-23.

The deficit figures have indeed improved—down more than $2.0 billion in FYs 2017 and 2018–thanks to the stronger-than-expected economy and rapidly reduced unemployment last year. But, initiatives in today’s federal budget add $6.3 billion to the current year’s (ending March 31, 2018) budget deficit, $5.4 billion to next year’s federal red ink and an additional $2.0-to-$3.0 billion annually over the forecast horizon ending in FY 2022-23 (see Table below).

Fortunately, Canada has by far the lowest debt-to-GDP ratios in the G7, reflective of the austerity programs of the past, beginning in the mid-1990s and continuing until the financial crisis in 2008-09 when counter-cyclical global fiscal policy was essential to assure financial stability and rebounding economic activity by late-2009. While the U.S. and much of the rest of the developed world suffered the longest and deepest recession since the Great Depression, Canada’s was the shortest and mildest recession in the postwar period—contrary to the impression left by the Finance Minister in his opening remarks.
Thanks to this backdrop, the debt-to-GDP ratio in Canada will continue to decline despite continued fiscal stimulus. The ratio is forecast to gradually edge downward from 30.4% this year to 28.4% in 2022-23, assuming the economy continues to grow. Clearly, all bets are off if we hit a pothole, such as the end of NAFTA or a recurrence of plunging oil prices.

Budget 2018 proposes to:

• Put more money in the pockets of those who need it the most, by improving access to the Canada Child Benefit and introducing the Canada Workers Benefit, a stronger and more accessible benefit that will replace the Working Income Tax Benefit.

• Make significant progress towards equality of opportunity, by taking leadership to address the gender wage gap, supporting equal parenting, tackling gender-based violence and sexual harassment, and introducing a new entrepreneurship strategy for women.

• Support the next generation of researchers, by providing historic funding to increase opportunities for young researchers and provide them the equipment they need, while strengthening support for entrepreneurs to innovate, scale up and reach global markets.

• Advance reconciliation with Indigenous Peoples, by helping to close the gap between the quality of life of Indigenous and non-Indigenous people, providing greater support to keep First Nations children safe and supported within their communities, accelerating progress on clean drinking water, housing, and employment, and supporting recognition of rights and self determination.

• Protect the environment for future generations, by making historic investments to preserve our natural heritage, ensuring a price is put on carbon pollution across Canada, and extending support for clean energy projects.

• Uphold Canada’s shared values and support the health and wellness of Canadians, by partnering with provinces and territories to address the opioid crisis, taking action to advance national pharmacare, and bolstering support for Canada’s official languages.

This list summarizes 367 pages of more than 100 relatively small government initiatives impacting everything from Workers Benefits payments to low-income families, improving access to the Canada Child Benefit to supporting opportunities for women, pay equity for federal workers, strengthening trade, improving worker skills, and cracking down on tax evasion—all of this among the roughly 25 government actions described in Chapter 1 under the heading of Growth. The details of changes in the rules regarding the holding of passive investments inside private corporations as well as closing tax loopholes fall under this Growth rubric.

Chapter 2, called Progress, includes more than 35 initiatives under the headings of Investing in Canadian scientists and researchers, Stronger and more collaborative Federal science, and Innovation and Skills Plan—a more client-focussed Federal partner for business.

Chapter 3, Reconciliation, largely deals with Indigenous Peoples, including roughly 20 actions.

And finally, Chapter 4, called Advancement, covers the environment under Canada’s Natural Legacy, Canada and the World, Upholding Shared Values, and Security and Access to Justice. I lost count here at over 40 initiatives.

And, that’s not all! A bonus section called Equality, goes into detail regarding Canada’s commitment to gender budgeting, which includes $6.7 million over five years for “Statistics Canada to create a new Centre for Gender, Diversity and Inclusion Statistics, a Centre that will act as a Gender Budget Accounting data hub to support future, evidenced-based policy development and decision-making”.

I kid you not. At my rough count, I have been to 34 budget lock-ups, but I can’t remember ever seeing anything like this for sheer magnitude of the number of relatively tiny initiatives, nor can I ever remember leaving a lock-up with such a screaming headache.