The Macdonald-Laurier Institute’s Leading Economic Indicator (LEI) has been updated this week, and once again it shows that Canada is experiencing economic growth as it emerges from the pandemic.
This marks 11 straight LEI increases in 11 straight months and with the LEI rising to 1.4 percent growth, this is the third consecutive month of growth above 1.3 percent.
Of the ten components of the economy that the LEI measures, eight increased, two stayed the same, and none decreased. And while the housing market and natural resources sector remain strong, the clear winners for this update (which reflects data from May) are commodity prices and the Toronto stock market, writes LEI author and MLI Munk senior fellow Philip Cross.
“Barring a resurgence of COVID-19 and associated lockdown measures, Canada is poised to enjoy the continued rapid recovery of the economy through the rest of 2021,” writes Cross.
Given this growth, then, the federal government’s continuing stimulus plans are inappropriate, he explains.
“In this favourable economic position, it is worrying that the government is keeping the fiscal and monetary stimulus taps open with unprecedented levels of spending and extremely low interest rates. It is readily apparent that broad monetary and fiscal stimulus is of limited use in an economy where most industries are prospering but a select few continue to lag.”