A number of our clients do business in Canada. It is one of the world's top trading economies, despite its relatively small population. Canada is a major exporter of commodities and food, and boasts expansive oil reserves. The country has strong trade links with the US and is increasing its trade with Asia. Our coverage – using our unique Total Analysis model – ensures that our clients make sound investment decisions in Canada. Our teams keep our clients informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. We also provide in-depth analysis on 23 of Canada's most important industries. Combining interactive data and forecasting with our risk-assessed and results-proven analysis gives our clients the big picture they need. We are confident that you, as our client, will find doing business in Canada is made easy.

Canada Country Risk

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Core Views

  • Oil production declines and weak non-commodity exports to the US, where we have recently lowered our real GDP growth forecast, will see economic growth in Canada slow.

  • Concerns over economic growth and jobs could hurt the Liberal's re-election prospects in 2019, as emphasis on social and environmental policies could be seen to undermine efforts to support provincial economies.

  • Canada's central bank will begin gradual monetary policy normalisation in 2017, as economic activity starts to recover.

  • Recovering oil prices will support Canadian dollar appreciation against the US dollar over the remainder of 2016 and in 2017.

Key Forecast Changes

  • We have lowered our real GDP growth forecasts for...

Canada Industry Coverage (21)

Canada Agribusiness

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BMI View: Our core outlook and forecasts remain largely unchanged in the Q4 2016 report update. BMI holds the view that the Canadian grains and beef sectors will emerge as winners of the Trans-Pacific Partnership. Additionally, expanded export possibilities will deliver output stability out to 2020. However, beef production will be constrained due to cattle supply. The Canadian pork sector will remain stable, largely as demand for Canadian live swine to the US remains steady. The dairy sector will post lacklustre growth prospects, while the sugar industry remains under pressure from low prices and...

Canada Autos

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BMI View: We now forecast light vehicle sales growth of 3.6% in 2016 which will take the market to another record. This means we now expect the market to contract in 2017 as this level of growth becomes hard to replicate in a mature market.

Passenger Car and Light Commercial Vehicle Sales
f = BMI forecast. Source: BMI, Industry Canada

Key Views

  • Light vehicle sales will grow 3.6% in 2016, led by a 12.0% increase in the light truck segment.

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Canada Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Canada Defence & Security

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BMI View: Canadian defence spending will be modest in 2016 but an improvement on the four consecutive years of negative growth the country has experienced since 2012. However, amid the government's ongoing fiscal consolidation program and budgetary limitations - not to mention the country's stable security landscape - we note that this forecast is likely to be revised downward. Indeed, despite the armed forces' requirements to replace ageing systems and renewed commitment towards developing the local industry, the funding available will instead mostly continue to be taken up by...

Canada Food & Drink

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BMI View: While 2015 marks the nadir of Canada's oil-related economic slowdown, we project a low average growth trajectory over the coming years. This is because despite early indications that a weaker exchange rate and stronger US demand are driving up vehicle and consumer goods exports, there are no signs of higher fixed investment into Canada's non-commodities sector thus far. We forecast average annual real GDP growth of 1.7% between 2015 and 2019, in contrast to an average growth rate of 2.5% in the preceding five years. The food market is set to be an underperformer in Canada over our forecast period, with stronger growth in drinks and mass grocery retail.

Headline Industry Forecasts (local...

Canada Freight Transport

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BMI View: We anticipate growth across all three freight sectors in Canada, with the rail sector achieving the highest levels of growth of 3.3% in 2016. This trend falls in line with signs of a general economic recovery in the country and growth in all key trade indicators, with total trade growing by 3.2% in 2016 and peaking at 3.5% in 2017. Canada will continue to trade primarily with the US and signs of economic recovery in the US should have a positive effect on demand for the country's goods.

We forecast real GDP growth of 1.5% in 2016, with business investment in machinery and equipment gradually replacing investment in the energy sector over the coming years. We forecast the weaker exchange rate and stronger US demand will see non-commodity goods exports rise and draw down inventories to an extent that businesses will step up their fixed investment in machinery and equipment,...

Canada Freight Transport

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BMI View: Steady if unspectacular growth is expected this year across Canada's freight transport sectors with rail outpacing air, road and inland waterway freight transports. Road will remain the dominant mode in terms of tonnage carried as it continues to serve domestic freight transport needs and trade with their close neighbour and main import and export destination, the US. Our outlook for throughput growth at the county's main ports this year has been modestly subdued due to slowing economic expansion for China, Canada's second largest trade partner. However we anticipate positive growth rates for all major ports in 2017 and over the medium, with European demand recovering and planned trade agreements materialising.

Forecast And Latest Updates

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Canada Information Technology

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BMI View: Canada's position as an IT market at the technological frontier is reflected in the lucrative nature of its market for vendors. However, as a result of maturity, growth prospects are diminished. We forecast IT spending in Canada will increase at a CAGR of 3.7% throughout 2016-2020, reaching a total market value of CAD73.2bn. There will be pockets of faster growth, for instance hybrid notebooks in the hardware segment. In the software and services...

Canada Infrastructure

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BMI View: The Canadian construction industry will recover from 2016 as the Liberal government spends big on infrastructure projects in a bid to stimulate the economy. However, we revised down our forecast for this year slightly due to subdued private investment and a slow start to stimulus programmes.

Latest Updates And Structural Trends

  • We expect a recovery in the Canada construction industry from 2016, driven primarily by heightened public investment in infrastructure.

  • However, due to the 2016 Budget coming up short of campaign promises on tangible new infrastructure spending, a weak Q116 and a data revision by Statistics Canada we have reduced...

Canada Insurance

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BMI View: We continue to hold a positive and stable outlook for the Canadian insurance industry. The Canadian insurance industry is large and well developed, and benefits from the presence of some of the leading global insurers, particularly robust in the life sector. The Canadian financial sector, supporting the insurance industry is well capitalized and robust. The regulatory environment supporting the Canadian insurance sector is strong and the industry also benefits from access to international capital markets which serve to make this an attractive investment destination. Nevertheless, currency fluctuations will result in short-term declines in premiums measured in US dollars. However, in local currency terms both the life and non-life sector will see sustained growth in premiums throughout our current forecast period through to 2020.


Canada Medical Devices

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BMI View : Canada has a sophisticated and well established medical device market which ranks eighth in the world in terms of value. We forecast that the market will register moderate growth in US dollar terms over the forecast period, which reflects a subdued economic outlook.

Projected Medical Device Market, 2015-2020
Total (USDmn) ...

Canada Mining

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BMI View: Canada's mining industry value will continue on a multi-year downtrend, as miners remain focused on cutting costs and curbing output in a structurally lower commodity price environment. Nonetheless, the country will remain a major global mining industry, supported by vast reserves and a stable operating environment.

Canada Mining Industry Value Forecast (2014-2020)
2014e 2015e 2016f 2017f

Canada Oil & Gas

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BMI View: Our growth outlook for Canada's oil and gas industry remains modest given mounting headwinds in both the upstream and midstream sectors amid a low oil price environment. The greatest threats to these projects are unfavourable project economics and regulatory headwinds that will hamper the growth of oil sands-driven production and LNG terminal development, weighing on total hydrocarbon output. This is exacerbated by the likely drop in exploratory activity throughout Canadian acreage as companies revise capital expenditures in the coming year...

Canada Petrochemicals

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Canada's petrochemicals industry saw mixed results in 2015 with a contraction in the value of basic chemicals sales, but strong growth in rubber and plastic production. While domestic petrochemicals consumption is expected to pick up in 2016, this could be offset by slower growth in Canada's main export market, the US. There are added challenges of carbon pricing and the declining competitiveness of Canada's ethane-fed industry relative to naphtha-based rivals in Europe and Asia. Nevertheless, in the long term, the availability of ethane derived from unconventional resources should drive petrochemicals investment.

In 9M15, the value of plastic products shipped rose 7.4% y-o-y while rubber rose 2.9% y-o-y. Chemical capacity utilisation rates averaged 84.3% in H115, up 8.7 percentage points (pp) over H114, while plastic and rubber rates were at 82.6% and 84.7%, up 4.2pp and 2.0pp respectively. Higher operating rates and...

Canada Pharmaceuticals & Healthcare

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BMI View: Canada has a number of domestic pharmaceutical firms and is a major market for foreign-based companies. Prospects for Canada's pharmaceutical market are relatively positive compared with many other developed countries. The government is not facing extreme fiscal pressures and the private sector makes a sizeable and complementary contribution to healthcare expenditure.

Headline Expenditure Projections

  • Pharmaceuticals: CAD25.07bn (USD19.61bn) in 2015 to CAD25.83bn (USD19.87bn) in 2016; +3.0% in local currency terms and +1.3% in US dollar terms. We have revised our forecast upwards from the previous quarter on account of the improving economic and political environment.

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Canada Power

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BMI View : The election of Justin Trudeau as Canada's prime minister and the introduction of a strategy to curb carbon emissions in Alberta will strengthen Canada's shift away from coal-fired power and towards renewables and natural gas-fired power generation over the coming decade. Hydropower will remain the dominant technology in Canada's power mix through 2024, due to a vast pipeline of large-scale projects planned and under construction.

Headline Power Forecasts (Canada 2014-2020)
2014e ...

Canada Renewables

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Renewables Headline Forecasts (Canada 2015-2021)
2015e 2016f 2017f 2018f 2019f 2020f 2021f
e/f = BMI estimate/forecast. Source: National sources, BMI...

Canada Retail

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BMI View: The Canadian economy will experience increasing levels of stability over the course of 2017. We expect household spending to remain flat as employment and wages slowly begin to recover after adapting to the new environment in commodity markets. In the short run, the Canadian dollar will remain weak and this will help attract tourists, particularly from the US, who will help boost retail spending in areas such as clothing and hotels.

Headline Household Spending
e/f = BMI estimate/...

Canada Shipping

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BMI View: In Canada in 2016, we anticipate that the Port of Montreal will continue to lead in terms of growth at 4.90%, albeit a bit lower than 2015's estimate. The port of Prince Rupert will shorten its lead in terms of container throughput growth, with Metro Vancouver closing the gap. We forecast that there will be no negative growth figures in 2016 despite the knock-on effects of the slowdown in China and the possible repercussions on global economic instability.

Canada's economy looks set to benefit from trade with the US and increased deficit reduction in 2016, as investment in the country's shipping sector continues to strengthen its offering by enabling more...

Canada Telecommunications

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BMI View: Following a series of high-profile spectrum auctions, subsequent spectrum trades and acquisitions, the Canadian market is set to resume its sedate pace of development. Although WIND Mobile is in a better position to become the country's long-awaited fourth national operator, its newfound private status means it may have neither the appetite or resources to capitalise on its circumstances. Meanwhile, established players remain focused on selling premium converged services .

Organic Growth Elusive, Focus Now On Upselling
Canada Mobile Market Forecasts

Canada Tourism

BMI View:

BMI View: A pickup in arrivals from the US will drive Canada's tourism market in 2016, with stronger US arrivals leading to an overall increase in visitors to Canada. We expect the hotels and hospitality sector to respond accordingly given already high levels of investment. We expect ongoing economic growth in the US to support tourism to Canada over the forecast period, ensuring ongoing expansion in the sector.

Key Forecasts (Canada 2013-2020)
2013e 2014e ...

Latest Canada Articles

Latest Canada Blogs

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  • Expectations are mounting from some quarters that the Bank of England ...

Latest Canada Podcasts

  • The Trans-Pacific Partnership is a proposed trade agreement which woul...

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  • BMI expects global mining M&A to pick up over the coming quarters....


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