Despite Obstacles, Canada’s Growing Labour Force Points to Strong Economy

Despite all the doom and gloom reported lately, Canada’s economy is actually growing. All signs point to an increase in Bank of Canada rates later today, as a new Labour Force Study from Statistics Canada indicates that for the month of June, the country’s labour force increased with the creation of 31,800 new jobs. The report also cites increasing self-employment levels.

An increase in job availability in Canada is promising, especially in light of the uncertainty with cross-border trade relationships. But it likely means we can expect an interest rate hike from the Bank of Canada when we hear from Governor Stephen Poloz this week. This will be the first time Canadians have seen an increase in months, and it’s anticipated that prime lending rates at the major banks will increase as well.

Despite the good news on the employment front, advisors and their clients still need to pay close attention to debt management, especially since Statistics Canada’s latest Labour Force Survey, also indicated a slight uptick in Canada’s unemployment rate. The increase in June from 5.8 to 6 percent is due to the 76,000 job seekers who re-entered the market.

Still, overall, the labour force has increased by 1.2 percent since the same period last year. Another notable point is the increase in the self-employed category, which 22,000 Canadians joined.

As reported last week, self-employment is becoming a more desirable career option for many Canadians, and it is a path that many tax and financial services professionals believe has significant financial benefits, with the right skill sets in place. From a financial planning point of view, the self-employed must be equipped with competencies in detailed and accurate documentation, as well as money management and retirement planning, as they are responsible for their own after-tax results.

A DFA – Tax Services Specialist can help Canadians who are self-employed, unemployed or re-entering the labour force, with sage tax counsel. For example, many Canadians may not have claimed all the deductions and credits they were eligible for when filing the 2017 tax return this spring. Finding those missed tax savings now and filing for an adjustment can help mitigate the impacts of rising interest rates.

A Real Wealth Manager can consult on tax-efficient investment and retirement savings, too. Find one to help you manage your money, or become one with specialized skills, by enhancing your education in the financial sector.

Stay tuned for our coverage next week on the outcome of the interest-rate announcement, and what it means for Canada’s housing market and overall economic outlook.

Additional educational resources:

1. What’s the impact of rising interest rates and how will it affect the clients that tax and financial advisors work with? Learn how to handle these issues by taking Knowledge Bureau’s Debt and Cash Flow Management course.
2. Interested in entering the self-employed market yourself? Enroll in the Executive Business Builder Program, or participate in this year’s Executive Business Builder Retreat.

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