It’s not easy being a resource economy in the midst of a commodity-price slump and a major global shift away from carbon.
The optimists say the worst is behind us — the TSX has tanked, the loonie has fallen, new investment in the oilsands has dropped off a cliff. There’s nowhere to go but up.
Well… maybe not just yet. The wise investor will always be aware of the traps ahead, and this year there is more than the usual number of pitfalls to watch out for. Here are six things policymakers and the rest of us should be keeping an eye on in 2016 and beyond.
For the past few years, investors around the world have been increasingly betting against Canada, short-selling Canadian stocks, banks, the loonie, real estate — anything you can bet against, they did. That’s at least part of the reason why the TSX was down nearly 12 per cent for the year, as of mid-December, and why the loonie is down to under 73 cents U.S., from above US$1 a few years back.
It’s all part of a growing feeling (at least outside Canada) that this country’s economic luck — propelled by oil exports and rising house prices — is running out. The optimists, however, say the worst is behind us. The pessimism about Canada’s prospects in the age of low oil prices has been “priced in,” they say, so it’s uphill from here. We shall see.
Full Story: http://www.huffingtonpost.ca/2015/12/28/risks-to-canadas-economy-2016_n_8820062.html