In current times, it is impossible to elaborate on any country’s economic situation without mentioning recession and inflation. Canada is no exception: on September 7, the Bank of Canada raised the base interest rate by 0.75 percentage points to 3.25% following a June hike of one percentage point - the largest single rate increase since 1998. While the rate is still low relative to that of some of its neighbours, economists seem to agree that another hike is likely at the end of October. However, some predict that this may be the last increase in a fight that has already seen the high in June of 8.1% reduced to a recently-published level of 7%.
Multiple sectors are showing signs of slowing, according to Statistics Canada. GDP is expected to contract from 3.1% in the third quarter of 2022 to 1% in the fourth quarter owing to fears over energy and recession.
Canada has been making headlines this year as it strives to become a top supplier to electric vehicle (EV) manufacturers worldwide. Large corporations have made recent investments or are in negotiations to build new production capacity for either raw materials, batteries or automotive production, including LG, Volkswagen, Mercedes and Tesla. According to Invest in Canada, this is the only country in the western hemisphere to have all the critical minerals required to produce EV batteries. The Canadian government is supporting multiple new projects in the lithium battery supply chain, reinforcing its desire to become a global leader in automotive electrification.