By Ketki Saxena
Investing.com — Key Canadian economic data for the past week included January GDP and key employment data including monthly employment, job vacancy data and average weekly earnings.
Employment figures changed little from December to January, while the job vacancy rate fell slightly (4.8% in January compared to 5.1% in December). Average weekly earnings have increased by 2.5% since January 2022. Notably, the Consumer Price Index has increased by 5.1% over the same period.
Other major Canadian economic news include two key pieces of fuel cost regulation: the increase in federal carbon pricing and the temporary repeal of fuel taxes in Alberta. For consumers, the increased federal carbon pricing will increase the price of gasoline by 2.21 cents per liter and diesel by 2.68 cents per liter across Canada except Alberta. Instead, Albertans can expect a 10 cents per liter drop in gasoline prices due to the fuel tax relief.
Recap of the week on the Canadian economy:
Negotiations of bilateral trade agreements between Canada and the United Kingdom: The week began with the first round of negotiations between Canada and the United Kingdom regarding a comprehensive bilateral free trade agreement. The two countries currently operate under an interim trade agreement which, post-Brexit, replaced the Comprehensive Economic and Trade Agreement (CETA) that Canada had in place for trade with the European Union. The agreement with the United Kingdom, Canada’s third-largest export market, should be ready in about a year.
Job numbers: Canadian employment figures were little changed in January compared to December. Employment gains in professional, scientific and technical services (+28,100; +2.6%) and construction (+21,900; +2.0%) were offset by declines in accommodation services and restaurants (-64,500; -5.5%), and in arts, entertainment and leisure (-15,600; -5.8%). The arts, entertainment and leisure sectors have been particularly hard hit following the reintroduction of Covid lockdowns in January.
Jobs : The job vacancy rate was 4.8% in January 2022, compared to 5.1% in December. This measure measures the number of vacant positions as a proportion of all positions (vacant and filled). In January, there were an average of 1.7 unemployed people for every job vacancy in Canada, up from 1.2 in December 2021.
Average weekly earnings: Average weekly earnings were $1,162 in January. Year-over-year, average weekly earnings have increased 2.5% since January 2021. Year-over-year, earnings grew at the fastest rate in retail trade (+8 .4% to $702), mining, quarrying and oil and gas extraction (+7.3% to $2,230). ) and professional, scientific and technical services (+7.1%, total value of $1,613) in January. Average weekly earnings were little changed in arts, entertainment and recreation, wholesale trade, and finance and insurance.
Canadian GDP: Canadian gross domestic product (GDP) rose 0.2% in January, up for the eighth consecutive month, despite strict pandemic measures still in place at the time. Goods-producing industries rose 0.8% in January, in line with strong consumer demand that characterized the pandemic. Service-based industries (0.0%) continued to feel the impact of the Omicron variant. The food, accommodation, arts, entertainment and recreation sectors have seen economic activity decline by 10% or more as businesses face near-total shutdowns in some provinces.
Increase in federal carbon pricing: On Friday, the federal carbon tax is set to increase by 25% to a total of $50 per ton of emissions. For consumers, the carbon tax amounts to an additional 2.21 cents per liter of gasoline and 2.68 cents per liter of diesel. According to estimates by the Canadian Taxpayers Federation, the federal carbon price now adds a total of 11 cents per liter of gasoline, 13 cents per liter of diesel and 10 cents per cubic meter of . Consumers in Alberta, Saskatchewan, Manitoba and Ontario, which do not have provincial carbon pricing policies, will receive federal tax credits to offset higher prices.
Alberta Fuel Tax Relief: Also on Friday, the Alberta government stopped collecting the provincial tax. The fuel tax relief was designed to give Albertans a 13 cents per liter discount at the gas pump, but will be partially offset by the federal tax increase. In fact, Albertans should see a 10 cent per liter drop in gas prices starting today. The tax will now operate on a sliding scale, with no tax in effect when it is above US$90 per barrel, and fully effective when it is below US$80 per barrel.