 Welcome to Mind Your Business ! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong
|  | The leaders of the four biggest federal parties at last week's French-language debate in Montreal. (Sean Kilpatrick/The Canadian Press) | | | There's just a week left in this election. This time next Monday, we will be getting ready to vote.
At the outset, I wrote about the economic question at the heart of this election. The issue, as I saw it then, was how best to deal with U.S. President Donald Trump.
But embedded in that question is a deeper one, more focused on Canada.
Whoever wins this election will have their work cut out for them. Finding a way to get the Canadian economy off the mat will be job No. 1.
We've gone over the grim details around the jobs market and per capita GDP here before, so I don't feel the need to revisit them today.
But Canada's next prime minister and the next Parliament will have to find ways to get businesses investing, people working and consumers spending.
Both major parties have promised to speed up the approvals process in this country. My colleague Mark Gollom wrote a great piece looking at the Conservative and Liberal plans to fast-track regulatory processes and create energy corridors to develop natural resource projects.
Gollom found it's an easy promise to make, but harder to actually implement.
Has the longstanding Canadian tendency to move slow and overthink finally been overwritten by the seriousness of Trump's threats?
One can hope. The severity of the downturn that looms was made abundantly clear by the Bank of Canada last week. | | |  | | | | | The Bank of Canada said forecasts aren't worth much right now, but offered two scenarios. One envisioned limited tariffs and a weakening economy, but only temporary. That's the blue line.
Scenario 2 is.... much worse. In that hypothetical, the trade war expands and drags on. Canada's economy plunges into a recession that lasts a year. Inflation surges.
That chart screams out a fundamental question: what's the plan to rebuild the economy from that?
In a lot of ways, the plan is to avoid it. And that's the right move.
But if it doesn't work, the consequences will be felt across the country, by everyone — not just those exposed to trade.
We are only weeks into the trade war and there have been almost as many exemptions as there have been tariffs.
But even that limited scope is having a real impact.
This chart from the Bank of Canada's Monetary Policy Report (its regular set of forecasts) shows some of the most important trends crossing paths and squeezing the economy. |  | | | That top red line charts population growth. A huge increase in immigration has had a sweeping effect on the economy and the data.
On the one hand, all those new arrivals to Canada helped juice economic growth. Without that, Canada would have likely slipped into a recession last year.
But the increase in population has dramatically cut Canada's per capita GDP figures. (We barely grew the economy while adding millions of people to the population, so per person, economic output has been downright lousy.)
You can see the yellow line is how many jobs we needed to add to keep the employment rate constant. We did not add that many jobs, so the unemployment rate has climbed.
Now those immigration numbers have fallen, as the feds turned off the taps. Housing markets will see some relief, but the downturn in population growth will hit the economy in other, unexpected ways.
And this weak, weakening and mixed-up economic landscape is about to become the full-time job of a political leader.
There are some clear and obvious ways whoever wins the Canadian election can boost the economy, no matter the state of trade.
I will dig into those ideas in next week's newsletter.
For all the latest on the election campaign, the trade war and, well, whatever else gets thrown at us, follow our coverage at cbc.ca/news.
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forwarded to you. | | |  | | Manufacturing sales figures for March on Friday will offer a first (preliminary) glimpse at how the Canadian economy has weathered U.S. tariffs so far. | | | | | | We will get a deep dive into the state of the Canadian jobs market on Thursday. The Survey of Employment, Payroll and Hours for February will show how the labour market was looking before tariffs started rolling. | | | | | | Retail sales figures will also come out Friday. These numbers will look back at the state of consumer spending in February. | | | | | Three things to read, watch and listen to this week | | |  | The Dark Money Game is actually two films exploring the role of money in American politics. (HBO) | | | 1. Mixing money and politics | | | Money is a funny thing. On the one hand, it's the one thing everybody can trust. You may not trust someone — but you and they both trust in money.
It can bring adversaries together and in many ways be the single thing any of them agree on.
But money can also corrupt. It can push friends and allies apart. Money follows its own rules.
And as the narrator in the new documentaries from Alex Gibney says, "money has a way of changing the rules."
The Dark Money Game is actually two different documentaries exploring how money, specifically dark money, has shaped American politics.
Here's how it's framed in the Guardian newspaper.
"Inspired by Jane Mayer’s book Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, the two films examine how a Supreme Court decision in 2010 known as Citizens United enabled corporations and unions to inject unlimited funds into elections, fostering a 'pay-to-play' system," wrote David Smith.
Gibney is the director of blockbuster documentaries such as Enron: The Smartest Guys in the Room and Going Clear: Scientology & the Prison of Belief.
"We’re on a knife-edge now, teetering toward authoritarian rule," Gibney told the Guardian. "What it really is is crony capitalism, and that’s what unites this administration with [Russia’s Vladimir] Putin, [Hungary’s Viktor] Orbán, [India’s Narendra] Modi and others."
Check out the trailer for The Dark Money Game here.
Read the Guardian review of the documentaries here. | | | 2. American tourism under threat | | | A few regular readers have said they'd like to see a regular tally of statistics looking into the impact of the trade war with the United States.
The hard part is parsing stats from anecdotes. It takes a while to compile the data.
Well, a handful of stories emerged last week looking at the impact on tourism in the U.S.
"The number of cross-border travellers going from Canada to the U.S. dropped by nearly 900,000 in March compared to the same month last year, according to the latest U.S. Customs and Border Protection (CBP) data," wrote colleague John Paul Tasker in this excellent piece.
Nearly a million fewer cross-border travellers would easily be one of the worst year-over-year drops recorded outside of the COVID-19 health crisis.
The CBC's Kris Reyes spoke with tour operators who rely on Canadian tourists.
"I don't blame you. I wouldn't come down to my country either if I were in your situation," said Matt Levy, who has been running Spread Love Tours in New York City for 20 years.
This Axios piece by Felix Salmon shows that the drop-off in tourism is not just a Canadian phenomenon. It found Asian and European tourists are also changing their travel plans.
And that's going to hit American companies.
"The travel industry was worth $1.3 trillion [US] in 2024, and supported 15 million U.S. jobs, per the U.S. Travel Association. Now, that revenue — and those jobs — are being threatened," wrote Salmon.
Salmon cites a report that found visits from Germany alone plunged by 28 per cent year-on-year in March.
The reasons the report found will not be surprising.
The drop in visits is due to the "early ramifications of a potent mix of negative sentiment, which has developed abroad in response to polarizing rhetoric and policy actions by the Trump administration, as well as concerns around tighter border and immigration policies," wrote Aran Ryan at Tourism Economics.
All this to say, I'm watching the data and will update when I find stories or stats that back up the anecdotes.
Check out J.P. Tasker's piece here.
Check out Kris Reyes's article here.
Read Felix Salmon's article in Axios here. | | | 3. How rare are rare earth minerals? | | | Regular readers know how much I love the podcast Odd Lots.
Hosts Tracy Alloway and Joe Weisenthal do a spectacular job of weaving intricate financial arcana into accessible conversations with subject matter experts.
And let me tell you, this episode is a doozy.
Bloomberg Opinion columnist Javier Blas is one of those guys I could listen to forever. He knows the energy sector inside and out. He can riff off the top of his head about things I've always wondered about.
Indeed, just last week, I wrote an article looking at whether China has more leverage than the Americans might have thought.
One thing I talked about was how China controls much of the world's mining and production of rare earth metals.
But Blas says the U.S. doesn't even import all that much of the stuff. And by "all that much," I mean a comparatively tiny amount.
"The United States imported in 2024 according to U.S. government data a grand total of $170 million of rare earth metals. Not billion, million," Blas told Alloway and Weisenthal.
"I’m pretty sure the United States imported more olive oil."
But he went on to talk about what rare earth metals are, and whether they're actually all that rare.
They're not. They're the by-product of other mining. The hard part, he says, is processing it.
"Because it's very polluting and it's a reason why all the processing has moved from everywhere else in the planet into China, because no one wanted to deal with how nasty the process is," he said.
Blas also riffed on what the recent plunge in oil prices will mean for Donald Trump's plans to "drill, baby, drill."
It's one of those episodes in which you'll find yourself scrambling for a pen to write down interesting things every two minutes.
Listen to this episode of the Odd Lots podcast here. | | | How the economy looks beyond Bay Street | | | Inflation update | | | Last week, I told you upcoming inflation numbers were expected to show price growth picking up steam again.
The consensus was that CPI inflation would come in around 2.8 per cent, after rising 2.6 per cent in February.
Well, we were all wrong.
Price growth actually cooled. And it cooled by quite a lot. | | |  | The year-over-year rate came in at a mere 2.3 per cent.
As you can see in the chart above, one sector that is seeing price growth accelerate is in groceries.
My colleague Abby Hughes wrote a fantastic piece highlighting how the impact of tariffs is starting to make its way onto our dining room tables.
"While a number of produce items from the U.S. aren't tariffed, fresh produce that is taxed has seen the most immediate increase," she wrote.
Hughes spoke to Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers, who told her Canada's 6,900 independent grocers operate on slim profit margins of around two per cent.
That's much smaller than the margins in many other sectors. So, Sands says, those price increases are being passed on to consumers.
"When you're on that kind of a margin, if you're being handed increases by … the food manufacturers of, you know, four or five, six, sometimes double-digit [per cent] increases, you're passing that on to the consumer, and there's just no way to get around that," Sands said.
What do you think?
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