Some good news for Canada’s economy

We all want Canada to succeed eco- nomically, which is why Statistics Canada figures released Friday on May’s economic growth numbers are positive news.

With a couple of cautions we’ll get to in a moment.

On the plus side, Canada’s real gross domestic product (real GDP) grew 0.6 per cent in May compared to April, triple economists’ predictions of 0.2 per cent and matching the highest month-to-month growth in six years.

Annual economic growth rose by 4.6 per cent, the biggest jump in almost 17 years, since October, 2000, when the economy grew by 4.7 per cent annually.

Adding to the positive news, growth was up across a wide range of economic sectors — 13 of 18 categories including energy and manufacturing — although real estate and construction were down.

While there are limitations on how much the actions of the federal government influence the overall economy, if the numbers were bad they’d be taking the blame, so expect the Trudeau Liberals to crow about these. Now, for those caveats. Doug Porter, chief economist of the Bank of Montreal, cautioned in a note to clients reported by The Canadian Press that May’s economic numbers are distorted on the high side because they come a year after wildfires in Fort McMurray, Alta., in May, 2016, shut down a substantial amount of oilsands production.

But even with that caveat, Porter and other economic forecasters now predict Canada’s real GDP growth will be about three per cent in 2017, a full point higher than the expectation at the start of this year.

The positive economic numbers sent the Canadian dollar higher to 80.52 cents Friday, compared to 79.87 cents Thursday, with the caution that if the dollar rises too high, too fast, it hurts our exporters.

Finally, economists predicted with the solid growth Canada is now experiencing, the Bank of Canada will likely raise interest rates again in October, after increasing its key lending rate to 0.75 per cent from 0.5 per cent earlier this month for the first time in seven years.

That will concern people renewing their mortgages after uninterrupted years of low rates.

And Canada isn’t out of the woods yet with Alberta, traditionally Canada’s economic powerhouse, still recovering from the global crash in oil prices and Ontario still the world’s most indebted sub-sovereign borrower, which creates problems of its own.