Unlike other countries around the world, growth in investment on the Toronto Stock Exchange (TSX) has stalled in 2017. (Source: The Economist 24 June 2017)
Investors from Canada and around the world are sending a clear signal that they think the investment climate in Canada is poor under the Trudeau government.
In the United States, the Dow Jones Industrial Average gained 8.3%, most European exchanges grew by more than 15% and in Asia, many country’s exchanges grew by at least 10% in US$ terms. Even Mexico’s market grew by 21.9% in US$ terms (7.3% in Mexican Peso terms) so Canada’s poor performance cannot be blamed on the policies of the Trump administration.
In Canadian dollar terms, the Standard and Poors TSX index dropped by almost 1%. Given that over $2,200 billion is invested in the TSX, this means that close to $22 billion of private investment has left Canada in 2017. This is money that had been working in Canada to create jobs and opportunities.
So why does this matter to “middle class” Canadians? The impact of private sector investment touches across our economy. For businesses, it means they do not have as much money to invest in improving or expanding their operations or hiring new staff. For people who are contributing to pension plans or saving for retirement, it simply means their pensions or investments may not be keeping up with the rest of the world. For retired people who are depending on their savings, they just aren’t going to go as far.
Investors don’t play politics with their money. They aren’t impressed by photo ops. Investors are looking for sound economic policies and future opportunities. In Canada, under the Liberal government, they are finding neither.