IMF国际货币组织全球-Canada_2019-Article-IV-Consultation_71页_1mb

2019 Article IV Consultation with Canada Summary

Core Content

The 2019 Article IV consultation with Canada by the International Monetary Fund (IMF) focused on securing sustainable growth and a resilient financial system. The consultation included a staff report, a press release, and an informational annex. The report analyzed economic developments, policy measures, and risks to the Canadian economy, emphasizing the need for fiscal discipline, monetary stability, and structural reforms to support long-term growth and financial resilience.

Main Views

Economic Performance

• Growth slowed to a more sustainable level in 2019, following a strong 2017 performance.
• Real GDP growth is projected to be 1.5% in 2019 and 1.9% in 2020 as the effects of a temporary slowdown in oil-related activity fade.
• Private consumption and residential investment have decelerated, while business investment is expected to benefit from new federal tax provisions.

Macroeconomic Risks

• Downside risks to the outlook are tilted, including potential housing market corrections, rising unemployment, and collapse in private consumption.
• External risks include a global growth slowdown, tightening financial conditions, and trade tensions, especially with the USMCA awaiting legislative approval.

Inflation and Monetary Policy

• Core inflation has remained stable around 2%, while headline inflation rose temporarily to 2.8% in 2018 due to energy price spikes.
• The Bank of Canada gradually increased the policy interest rate by 125 basis points to 1.75% since 2017.
• Monetary tightening should proceed cautiously, guided by incoming data.

Fiscal Policy

• Fiscal consolidation should remain gradual and growth-friendly.
• The federal government has a surplus of 0.4% of potential GDP in 2018, while provincial deficits have widened.
• Fiscal rules could help strengthen credibility and transparency, but some Directors believe they are not necessary given Canada's strong fiscal management.

Financial Stability

• Macroprudential measures have helped reduce housing-related financial stability risks.
• The housing market has cooled, with mortgage credit growth slowing to 3.1% and house prices in major cities still overvalued by 50%.
• Household debt remains high at 176% of disposable income, and a gradual slowdown is desirable to reduce vulnerabilities.
• The financial system is generally healthy and resilient, but modernization of the financial stability architecture is needed.

Structural Reforms

• Productivity gains are possible through reducing domestic trade barriers and improving infrastructure.
• Trade diversification and free trade are important for long-term growth.
• A more detailed strategic infrastructure plan is needed to prioritize projects that serve long-term interests.

Key Issues and Policy Messages

Fiscal Policy

• Fiscal consolidation should be gradual.
• Federal and provincial fiscal rules should be considered to enhance long-term fiscal sustainability.
• Provinces with high deficits or debt should take fiscal adjustment measures.

Monetary Policy

• Monetary policy should be on hold until the output gap is closed.
• Tightening should be cautious and data-driven.

Housing and Financial Stability

• Macroprudential tools should not be diluted.
• Collaboration between federal and provincial governments is needed to increase housing supply and improve affordability.
• Microprudential supervision and safety nets should be strengthened to complement macroprudential measures.

Trade and Growth

• Trade liberalization and diversification are key for long-term growth.
• Internal trade barriers should be reduced to improve inter-provincial trade.
• Infrastructure investment is important to support productivity and growth.

Corruption and Governance

• Canada has voluntarily participated in the Fund's enhanced governance framework on the supply and facilitation of corruption.
• Further progress is needed on AML/CFT and anti-foreign bribery frameworks.

Selected Economic Indicators (2015–2018)

Summary of Executive Board Assessment

• The Canadian authorities were commended for sound economic management and progress in reducing financial sector vulnerabilities.
• Financial stability is well preserved, but long-term growth requires productivity and competitiveness improvements.
• Cooperation between federal and provincial governments is essential.
• Automatic stabilizers should be allowed to operate fully if downside risks materialize.
• The housing market remains a key risk, with overvaluation in major cities and high household debt.
• Fiscal rules and fiscal discipline are important for credibility and transparency, but not mandatory in this context.
• Infrastructure investment and structural reforms are necessary to boost productivity and long-term growth.