Centre for Future Work

Centre for Future Work Economist and Director Jim Stanford was recently invited to give testimony to the Senate’s National Finance committee, regarding the state of Canada’s macroeconomy in the wake of Donald Trump’s trade war and other geopolitical uncertainty. Stanford emphasized the continuing resilience of the national economy, which has avoided recession and recently chalked up decent growth and job-creation numbers – despite the damage done by U.S. tariffs to our exports and business investment. He warned Senators that diversifying the destination for Canadian exports is not an adequate response to current risks: Canada must also focus on diversifying the composition of exports, using pro-active measures to add value to Canadian resources through processing and manufacturing (rather than depending mostly on exports of unprocessed resources, which now account for over 50% of total Canadian merchandise exports). He also stressed that the challenge of the trade war does not justify jettisoning core labour, social, and environmental criteria in economic development policies. Stanford specifically criticized the federal government’s intention (in its Bill C-39) to codify ministerial powers to ban strikes in the federal sector of the economy, on vague and subjective grounds of ‘national interest’.

Stanford’s opening remarks to the Senate committee are posted below. They draw on more extensive analysis contained in several recent public presentations; see Stanford’s presentation slides here for more detail.

Opening Remarks Senate Standing Committee on National Finance Hearings on Canadian Economic Outlook, Sep. 29, 2026 By Jim Stanford, Economist and Director Centre for Future Work

Thank you very much, Senators, for the opportunity to meet and share my views on Canada’s economic and fiscal situation as you prepare for the upcoming federal budget.

The Centre for Future Work is a labour economics research institute, founded in Canada in 2020. We conduct research on the full range of economic issues facing working people: including the future of jobs, wages and income distribution, skills and training, sector and industry policies, globalization, the role of government, public services, and more. The Centre also develops timely and practical policy proposals to help make the world of work better for working people and their families.  The Centre is independent and non-partisan.

Today I will provide some short comments on the current state of Canada’s economy, how it is withstanding the uncertainty caused by the erratic changes in U.S. trade policy, and themes that the federal government should emphasize in its future actions. Then I will welcome your questions and comments.

Recent economic indicators confirm that Canada’s economy is maintaining its stability and momentum despite the disruptions arising from U.S. tariffs and other uncertainty on the international front. Second-quarter growth was both strong and well-balanced. All major cylinders in Canada’s economic engine were firing: with significant growth in consumer spending, government expenditure (on both current services and capital investment), business non-residential investment, residential investment, and exports. Even our exports to the U.S. grew, as well as our exports to other countries. The overall rate of growth (2.3% annualized) would have been much stronger but for a major inventory drawdown during the quarter, as businesses worked down excess inventory accumulated in previous less vibrant quarters. That portends continued strength in future quarters, as firms adjust to renewed growth and readjust their inventories accordingly.

In the labour market, job-creation has been decent if not spectacular, with over 200,000 jobs created in the last 12 months, most of them full-time. Even manufacturing (which has borne the brunt of U.S. trade actions) has seen year-over-year job growth of over 20,000 new positions, which attests to the diversity and resilience of this vital sector. Ironically, the weakest employment numbers are presently arising from the public sector, including education (mostly due to job reductions in colleges, adjusting to the whiplash effects of erratic immigration policies for international students) and public administration (mostly due to headcount reductions in the federal civil service). This public sector downsizing is unnecessary. The public sector is relatively insulated from President Trump’s trade actions, and should be a source of stability as the economy adjusts to the new global environment. The federal government in particular should rethink this downsizing, which will also affect the quality of federal service delivery to Canadians.

One warning sign from the labour market is a noted deceleration of wage growth, which had been quite robust over the previous four years. The initial inflation shock following the COVID pandemic required a pickup in wage growth in Canada, to try to restore real purchasing power for Canadian workers damaged by the temporarily high inflation of 2022 and 2023. That repair job worked: wage growth exceeded inflation significantly from late 2023 until the present, allowing real wages to recover and then some. Real wages are now higher than they were before the pandemic, and this has been essential in helping Canadian address affordability challenges. It is testament to Canada’s labour relations system that real wages, on average, have been more than fully repaired. Strong improvements in minimum wages in most provinces (and the federal jurisdiction), and Canada’s strong collective bargaining system, explain why real wages have performed better here than in many other countries – including the U.S., where real wages are falling.

However, a combination of slower wage growth and a rebound in inflation (resulting from the U.S. war against Iran) are now threatening that success. Hourly nominal wages were up only 2.0% year-over-year in August, the slowest in 5 years – and not enough to keep up with current inflation. Placing continued priority on strong wage gains for Canadian workers will be essential for protecting purchasing power and sustaining consumer spending, which after all accounts for half of total GDP. In this context, I must express alarm regarding the federal government’s intention to codify restrictions on normal collective bargaining rights in its proposed changes to the Canada Labour Code, as part of its current Bill C-39. Codifying the government’s right to interfere arbitrarily in bargaining and suppress constitutional rights (including the right to withhold labour) on the basis of vague and subjective measures of ‘national interest’, is a step in the wrong direction, that would heighten the risk of future deterioration in real wages in Canada.

Canada’s trade performance has also been surprisingly robust despite the impact of swings in U.S. policy. Exports of goods and services in nominal terms have increased to both the U.S. and other countries, partly due to higher prices (especially for oil) and partly increased volumes. Since the end of 2024 (when President Trump won election), Canada’s exports to countries other than the U.S. have grown by 18% (to the second quarter of 2026). Even our exports to the U.S. are up 9%. The share of our total exports going to the U.S. has fallen to 67%. There is a lot going on behind these numbers (including the rise in world petroleum prices following the U.S. war on Iran), but it seems clear that efforts to diversify Canadian trade ties are paying off.

Let me conclude with some high-level thoughts about the broad task facing Canada’s economy in the coming years. The attacks on our economy, and indeed our sovereignty, from south of the border are forcing us to redefine how we orient Canada’s economic and social development. Instead of relying on access to the huge U.S. market as our key advantage in investment location, we must develop a more self-reliant and diversified vision for future investment, innovation, trade, and growth. This means attracting more investment here (from both foreign investors, but also more investment of our own capital, such as the trillions held by Canadian entities, including our pension funds, in the U.S. and other foreign markets). It means strengthening our trade ties with the rest of the world. But it’s not just the quantity of investment and exports that matters: it’s also the composition of those flows, and the quality of the economy – and society – that we build. There is a current temptation, as we gird our national loins to withstand the irrationality of the Trump administration, to double down on anything we can do, and do quickly. This has contributed to a great rush to expand resource extraction and exports.

However, reinforcing Canada’s dependence on extraction and export of unprocessed primary products has its own risks to our economic capability and sovereignty – including well-known vulnerability to global demand and geopolitical swings, as well as (in the case of fossil fuels) environmental risks that are more urgent every year (and which continue to accumulate regardless of the climate denialism of the U.S. government and some others). Our vision should be to build an economy that is not just viable in the face of Trump’s attacks, but retains the core values which motivate Canadians to defend our country as an entity distinct from that south of the border. That means preserving a balance in our economic strategy between getting big things done quickly, and making sure we are doing the right kinds of big things, and doing them properly – including with due attention to sustainability, Indigenous consultation and consent, and basic social and labour values and rights. In that regard, it is more important than ever for Senators to play their full oversight role, to ensure that the federal government’s response to this dangerous moment does not dismiss those values and priorities in a rush to sign deals and accelerate projects.

Thank you again for your attention, and I look forward to your questions or discussion.

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British Columbia should make long-term care part of its big-project building agenda and commit to a construction timetable for seven deferred public care projects, says a new report from the Centre for Future Work.

The report examines the economic benefits of building public long-term care facilities, and the dangers and costs of relying on for-profit operators. It argues that full accounting of the costs and benefits of long-term care construction needs to include financing charges (which are much lower for public builds), broader economic spin-offs from new construction, and a range of savings resulting from superior health outcomes demonstrated in public facilities.

Projections indicate the province needs 16,000 additional subsidized long-term care beds over the next decade—about 1,600 a year. But over the last six years, B.C. added an average of only about 240 net new beds annually.

Despite that gap, seven public long-term care construction and redevelopment projects were deferred in the province’s 2026 budget. The provincial government continues to list the projects in its long-term capital plan, but without firm timelines for construction.

The report challenges exaggerated stereotypes about the cost of building public long-term care facilities, and called for more transparent and systematic comparisons of cost estimates. Many public projects include services such as child care, hospice spaces and other services, often accessible to the broader community – making simple per-bed comparisons misleading.

Financing is an important cost advantage for public builds. In an illustrative comparison, the higher cost of private borrowing increases cumulative interest costs by 41 per cent, adding $49 million to a $200 million project over 25 years.

Most long-term care in B.C. receives provincial government funding, regardless of whether a facility is publicly owned, non-profit, or for-profit. Those payments help cover building and financing expenses as well as operating costs. Data published by the B.C. Senior’s Advocate indicates that building costs in private facilities (ultimately charged to the public purse) are much higher than non-profit facilities.

Outsourcing new builds to private operators does not make the public cost disappear. Government still pays for those facilities through decades of care funding.

The report calls for a transparent comparison of construction costs across public, non-profit and for-profit facilities. It identifies ways to improve value in future projects, including using public land, sharing sites with other health services, standardizing designs and coordinating procurement.

It recommends that the provincial government quickly complete its review of the deferred projects, and publish a reliable construction timetable by the next provincial budget. It also calls for capital funding and development support for non-profit providers, alongside a longer-term plan to meet projected demand.

Please see the full report, Economic Benefits from Construction of Public Long Term Care Capacity in British Columbia, authored by Jim Stanford, Economist and Director of the Centre for Future Work.

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BC Ferries recently announced a purchase of four major new vessels from a shipyard in China. This decision has sparked criticism from trade unions and others, who argue the ferries should have been commissioned from domestic shipyards.

New research from the Centre for Future Work confirms that the decision to import the ferries, rather than domestic procurement, imposed a significant foregone economic cost on the province.

Sourcing an equivalent value of shipbuilding from domestic yards would generate $1.5 billion in additional GDP in Canada (85% of that in B.C.), over 10,000 person-years of employment, and would return over $400 million in additional revenue to government coffers (providing a financial basis for public support for future procurement).

The report reviewed the current scale of shipbuilding in B.C. and Canada, highlighting the strong employment growth in the sector over the past 15 years (largely due to a pro-active procurement strategy for Navy and Coast Guard ships from the federal government). It reviewed the role of active industrial policy in supporting shipbuilding in other major producers – including the U.S., China, and Europe.

It also surveyed the current capabilities of B.C.’s shipbuilding sector, identifying gaps that should be addressed in order to ensure the industry can source future ferry procurement from the provincial ferry operator.

The report concluded with several recommendations, including:

1. Establish a Ministerial-level task force to coordinate the development and implementation of a robust provincial shipbuilding strategy.
2. Amend contractual and fiscal arrangements with BC Ferries to require the firm to maximize economic benefits from domestic procurement of future vessels.
3. Commitment to accelerate the electrification of ferries, and development of B.C. technological and industrial expertise in electric vessels.
4. Formation of a consortium of firms to organize and plan the expansion of future shipbuilding capacity in B.C.
5. The provincial government should be prepared to take equity stakes in future ventures.

1. A strong marine sector workforce development strategy to ensure a steady and adequate supply of skilled workers for the shipbuilding and marine sectors.

Please see the full report, The Economic Benefits of Ferry Construction in B.C., by Jim Stanford, Blair Redlin, and David Fairey.

A video reviewing the main findings of the report, recorded during a public launch event, is available on the Centre for Future Work’s YouTube channel.

The report generated numerous media articles, including:

• Newspaper articles in the Vancouver Sun, the Toronto Star, and numerous other outlets.
• Television coverage on CHEK TV and other stations.
• A feature interview on the Jas Johal Show on CKNW Radio.

The post B.C. Missed an Economic Opportunity by Importing New Ferries From China, Rather than Building them Here appeared first on Centre for Future Work.

Albertans will vote on October 19 in an unusual ‘referendum on a referendum’, initiated by the Alberta government of Premier Danielle Smith. The referendum asks voters whether they prefer to stay part of Canada, or prefer to initiate a process of negotiation and preparation fo0r a binding referendum on separation some time in the future.

Many economic, business, and civil society leaders have warned of the economic risks and costs of even a significant threat of Alberta independence, let alone outright separation. But working people are especially exposed to those risks, for several reasons: they need employment, they depend disproportionately on federal income supports (like CPP, EI, and the Canada Child Benefit), they depend on unions and labour standards to negotiate their wages, and they are less mobile across borders than investors or high-income households.

The Centre for Future Work has explored the particular risks facing Alberta workers from the separatist movement, in a new report published in conjunction with the Alberta Federation of Labour.

The report challenges several of the myths propagated by the separatist movement – in particular, claims that an independent Alberta would be richer, have lower taxes, and more opportunity to sell products to other countries.

It also reviews several statistical indicators of declining living standards for Alberta workers in recent years. It finds that Alberta workers are quite right to be angry about stagnant wages, falling purchasing power, and growing insecurity in the province – but those problems should not be blamed on a distant federal government. Rather, they result from problems right at home in Alberta, in particular the distorted playing field of labour relations, which has undermined the bargaining power of Alberta workers to negotiate better jobs and wages.

The economic pie in Alberta has been growing: oil and gas production and export set new records every year, and output per worker is the highest in Canada. But labour’s share of that economic pie (in wages, salaries, and benefits) has been shrinking faster than in any other province, and average wages now barely match the Canadian national average.

The report concludes that by defeating the false hopes of separation, workers in Alberta can refocus their rightful anger on the task of reforming Alberta’s labour and economic policies, so that the province’s abundant wealth can be shared more fairly.

Please see the full report, False Promises, Big Dangers: How Separation Would Hurt Alberta Workers, by Jim Stanford, Economist and Director of the Centre for Future Work.

The report generated abundant media coverage, including:

• Newspaper articles in the Calgary Herald and the Lethbridge Herald.
• Interviews on CBC Radio and 880 CHED.
• A feature interview with Ryan Jesperson’s Real Talk video podcast.
• A commentary in The Tyee, targeting the myth that Alberta ‘subsidizes’ the rest of Canada.

The post Workers are Especially Exposed to the Economic Risks of Alberta Separation appeared first on Centre for Future Work.

U.S. President Donald Trump has opened another front in his trade war against Canada, suggesting that Canada is taking advantage of the U.S. through its currency. Both currencies are called the dollar, but Canada’s trades for less than the U.S. currency, and Trump argues this creates an unfair advantage.

More than 25 countries in the world have a currency called “the dollar”. Apparently, according to Donald Trump, 24 of them must be taking advantage of America because their dollars are different from his.

Canada has had a flexible exchange rate since 1970 (and also had a flexible rate between 1950 and 1962). It was one of the first industrial countries to abandon fixed exchange rates as the Bretton Woods financial system was dismantled in the early 1970s. The exchange rate is determined by numerous factors, including financial capital flows, comparative interest rates, comparative inflation, and investor expectations. The present exchange rate (about 72 cents U.S.) is well within the range of its historical fluctuations, and is in fact slightly stronger than when Trump took office for the second time in January 2025.

Of course, the fact that America’s dollar is used (for now, anyway) as a global reserve currency, hence allowing the US to run trade deficits every year for 50 years, is a unique privilege, not a sign of victimisation. America consumes far more than it produces, year after year. But inflows of capital from other countries, and holdings of U.S. dollars by foreign investors and institutions, allow the U.S. to maintain this ongoing trade deficit.

The world (including Canada) supplies the US with trillions of dollars of purchasing power every year, allowing this permanent trade deficit to continue. We explained this relationship in our research report, Who’s Subsidizing Whom? Over the past decade, new purchases of U.S. debt (mostly from the federal government) have almost perfectly offset the cumulative U.S. bilateral trade deficit with Canada over that same period. In short, it is Canada subsidizing America (with transfers of money), not the other way around.

Centre for Future Work Director Jim Stanford commented on Trump’s arguments about the currency on Global News’ national television broadcast.

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