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Canadian Economic Outlook 2024: Navigating Challenges and Opportunities 

As the final curtain fell on 2023, many Canadian entrepreneurs might be breathing a sigh of relief. Still, the road ahead for 2024 is paved with cautious optimism rather than unbridled enthusiasm. Despite grappling with persistent inflation and escalating interest rates, the Canadian economy displayed a degree of resilience in the past year. However, as we delve into the 2024 economic forecast, a more measured outlook emerges, signalling a shift into neutral territory. 

Highlights of 2023: Surprises and Setbacks 

At the onset of 2023, economists questioned the feasibility of cooling down the Canadian economy without triggering a recession. Yet, against the odds, the Canadian economy managed a 1.1% growth, slightly below its 2% potential but surpassing initial forecasts. The key driver was robust population growth, fostering demand that, in turn, supported the labour market. While the unemployment rate experienced a late-year uptick, it was attributed to a growing active working population rather than a hiring slowdown. 

The Bank of Canada responded to this resilience by raising its key rate by 75 basis points, reaching 5.0% by the year’s end. However, this led to uneven growth, impacting interest-sensitive sectors like housing. The housing market witnessed a marked slowdown, with households tightening their spending and a global economic deceleration affecting business investment and exports. 

Forecast for 2024 

  • GDP Growth – The Canadian GDF is forecasted to grow by 0.9%, with one or two quarters of negative growth early in the year. Economists expect uneven growth due to high-interest rates affecting housing and business investment sectors. 
  • Inflation – Inflation is expected to fluctuate between 2% and 3%, with certain items like food and housing experiencing higher price increases. Food price inflation, on the other hand, is forecasted at 4-5% due to global market dynamics and a weaker Canadian dollar. 
  • Interest Rate Outlook – Economists are anticipating a more predictable interest rate environment. Bank of Canada expected to lower key rates in the summer of 2024, but rates will remain higher than in the past 15 years. 

Risks for 2024 

  • Geopolitical Conflict – Growing tensions could disrupt energy markets and reignite inflation, leading to further rate hikes. 
  • Persistent Inflation – Overly strong demand fueled by population growth could lead to sustained inflationary pressures. 
  • Collapsing Demand – Even without rate hikes, current interest rates may challenge consumers and businesses, particularly due to high debt levels. 

Regional Variances in Economic Impact 

  • Provinces and Sectors: Sensitivity to interest rates results in varied impacts, with real estate and financed goods feeling the slowdown more acutely. 
  • Monetary Policy Impact: The Bank of Canada’s efforts are effective, but inflation reduction varies across regions, with Quebec experiencing the highest inflation rate. 
  • Regional Growth Outlook: Provinces like Alberta and Saskatchewan, less dependent on household spending, are set to grow above the national average. 

Challenges and Opportunities for Entrepreneurs in 2024 

  • Human Resource Strategy 
  • Opportunity: Economic slowdown facilitates easier workforce acquisition. 
  • Challenge: The aging population poses a long-term hiring challenge, emphasizing the need for a robust human resource strategy. 
  • Financial Health and Technology Adoption 
  • Need: Financial prudence is essential with high-interest rates and slowing demand. 
  • Opportunity: Embrace technology for productivity enhancement and improved competitiveness. 
  • Strategic Preparedness: 
  • Advice: Entrepreneurs should stay nimble, adapting to economic shifts. 
  • Strategic Advantage: Early adoption of technology positions businesses for success when the economy rebounds. 

As entrepreneurs navigate the Canadian economic landscape of 2024, a cautious approach, strategic resilience, and a forward-looking mindset will be crucial. Challenges are accompanied by opportunities for those who can adeptly maneuver through uncertainties, setting the stage for long-term business success. 

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Rob G.C. Sobey

Board Member

Rob G.C. Sobey is a corporate director. Mr. Sobey was the President & Chief Executive Officer of Lawton’s Drug Stores Limited from 2006 until his retirement in 2014 after 25 years with Sobeys. He serves as a director of SeaFort Capital and the Institute of Corporate Directors. Mr. Sobey is Chair of the Sobey Art Foundation, a member of the Queen’s Smith School of Business Advisory Board and serves on several foundation and not-for-profit boards. For his work as an Honorary Colonel of the Canadian Army, Mr. Sobey received a Queen Elizabeth II Diamond Jubilee Medal. He holds an undergraduate from Queen’s University, a Master of Business Administration from Babson College, and the ICD.D designation.

Denburk Reid

Board Member

Denburk Reid is the founder of Montreal Community Care Foundation (MCCF). Its mission is to empower youth by developing their leadership skills by using programs, workshops, and events, and by building bridges between communities. As the founder of MCCF, he beliefs that the youth hold the key to Montreal’s future and over the past eight (8) years, its programs have helped hundreds of Montreal youth stay on track, perform community services as well as set and achieve academic and life goals. The organization seeks to empower youth to become engaged citizens and leaders in their homes, schools, and communities. For the past five (5) years, MCCF celebrates and promotes community engagement across Montreal through the Montreal Community Cares Awards.

Along with his role as the founder of MCCF, Mr. Reid is the Founder of Red Rush Basketball & Red Rush Basketball Leadership. He has a passion for empowering youth and meeting them where they are lends to a successful outcome.

Abdikhier Ahmed​

Board Member

Mr. Ahmed is a recognized community leader in the non-profit sector with specializations in immigration and refugee resettlement, poverty reduction, and community empowerment. A dynamic, highly motivated individual with extensive experience in program development and delivery, providing strategic visioning and leadership. Over 10 years’ experience managing programs for non-profit organizations and working with communities and people from diverse socio-economic and cultural backgrounds both locally as well as internationally. Fluently multi-lingual: speaks and writes English, Swahili, Somali and basic Arabic. This experience help guide Mr. Ahmed when he was in the role of Director of Policy at the Office of Canada’s Minister of Families, Children and Social Development.

Mr. Ahmed is currently the Executive Director of Aurora Family Therapy Centre. Aurora is a progressive, non-profit family therapy centre that offers family therapy on a sliding scale; sees clients through services funded by Manitoba Department of Families and Department of Justice; provides community building groups for Newcomers to Canada; hosts a Psycho-Social Settlement Needs Assessment program for incoming refugees; provides summer youth programming for many newcomer communities; supports its own staff and other agencies through vicarious trauma and resilience programming; develops supportive relationships with community partners, and engages in advocacy for accessible community-based therapy services for all. Aurora is in the process of becoming a Centre of Excellence in providing cross cultural therapy from a systemic lens with a special focus on psychological trauma & recovery and community development.