City of Surrey 2017 - 2021 Financial Plan

Economic Overview

It remains to be seen whether the Trump administration will follow through on its promises of an “America First” approach. Trade protectionism and repatriation of outsourced jobs may not be necessary given the current positive outlook for employment. There are looming uncertainties surrounding President Trump’s economic and foreign policies. During his campaign, Trump vowed to withdraw from the North American Free Trade Agreement (“NAFTA”). His stance has since pivoted with the apparent objective now shifting to a renegotiation of NAFTA’s terms instead of an all-out exit from the agreement.

Source: Bank of Canada

CANADA

Canada’s GDP is forecasted to grow at a rate of 1.8% in 2017. Alberta and Saskatchewan’s economies are anticipated to grow at a rate of 2.2% and 1.7% respectively. As long as oil price improvements materialize as expected, both provinces should see a turnaround after the past two difficult years. The national unemployment rate is forecasted to remain close to 6.9% while inflation is expected to come in at 1.5%. With Alberta and Ontario introducing carbon pricing this year, the cost of living is expected to increase. A Carbon Tax will apply to gas, diesel, natural gas and propane. Increased fuel and transportation costs are expected to trickle down to consumer goods and services. Food prices are forecasted to rise 3% due to a lower Canadian Dollar. The Bank of Canada (“BOC”) is expected to keep its key interest rate at 0.5% during 2017 due to ongoing excess capacity and slack within the economy. The Canadian dollar is expected to trade below 75 cents US during the year.

2017-2021 FINANCIAL PLAN

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