So the Bank of Canada announced today that interest rates would stay the same, which wasn't that much of a surprise. Perhaps more surprisingly, the BoC cut their GDP growth projections for 2016 and 2017. The GDP growth was cut to 2.0% from 2.3% in 2016 and 2.5% from 2.6% in 2017. The 2015 number remained at 1.1%.
I'm not particularly surprised, considering that I don't think that the Ontario economy in its present condition with low productivity growth can grow much past 2% a year. The current Ontario budget predicts growth of 2.7% in 2015, which will be impossible to meet now, with negative growth in the first quarter for Ontario and 1.1% GDP now predicted for the entire country. Job growth in Ontario in 2015 has also been almost non-existent. The budget also predicts GDP growth of 2.6% in 2016, which considering the large part of the economy Ontario makes up of the whole country and growth for the whole country is predicted at 2.0%, seems unlikely. That will have knock on effects on the Ontario budget revenues.
Ontario should be releasing second quarter numbers for GDP soon, which should be interesting.