Government spending is a mixed picture. While it has been supporting growth recently, this support is expected to wane in 2020 as consolidation in Ontario and Alberta takes hold and the recent strength in Quebec and British Columbia normalizes. These dynamics were built into our October projection. On the federal side, the government’s fiscal plans are pending.
The slowing of growth in Canada’s economy has been concentrated in goodsproducing industries, which were more heavily affected by the trade conflict and by lower commodity prices. The service sector—which now accounts for about 70 percent of the economy—has continued to show solid growth for some time. Our overall assessment is that the Canadian economy is near capacity. However, this masks significant regional differences.