Canadian Outlook Long-Term Economic Forecast: 2005

This annual economic forecast presents the long-term national outlook. The U.S. economic outlook is presented in a separate section.

Document Highlights

• Canada’s economy is expected to see compounded annual growth of 2.5 per cent between 2005 and 2025.
• Immigration will become increasingly important for population and labour force growth.
• The Canadian dollar will appreciate toward its equilibrium value in the 2007–2025 period, thanks to a realignment of global capital flows.
• Interest rates will rise over the medium term and then, given stable inflation, remain static throughout the long term.
• Despite strong gains expected in public health care spending, overall government spending on goods and services will be modest over the long term.
• Real export growth will ease over the long term because of slowing U.S. growth and an appreciation in the dollar.
• Construction of new housing units will decline over the long term as demographic factors weaken new household formation.