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Why Should we Care about Economic Developments?

Watch for Economic developments in Canada

Almost everything that happens in the economy has a significant effect on us.   There are constant changes in the economic development. Currently the three major ones are the big plunge that took place with the oil prices.  Then there is the drop in the Canadian dollar.   Plus the policy response of the Bank of Canada has a dramatic impact on the economy.

So how do these three current major developments affect you in Ontario?

It is really interesting that we are privy to so many economic experts yet they all can’t seem to agree on just what kind of impact the drop in oil prices really have.   In many ways economic forecasting is just like forecasting the weather.  It’s unpredictable!

The general consensus is that Ontario is fairing better than many of the other provinces.   Some experts are forecasting that the GDP (gross domestic product) will grow by 3.3% for Ontario.

It is the oil producing provinces that will suffer the most.   For those provinces who use the oil, the lower price is a bonus.

Trade to the US is expected to increase so this will enhance the export business.   As long as the gas prices remain low it means more dollars for those in Ontario to spend in other places.  The experts predict that the average person will use a portion of this to buy goods in general while also concentrating on debt reduction.   The housing market should stay healthy and prices for re-sales will probably increase.

Understanding what is taking place in the economy is no easy task, but because it has some a dramatic effect on your lifestyle you really should attempt to gain a general understanding of it.   It can help you with making some really important decisions.

We have all become generally aware of the housing market terms like it’s a buyer’s market or it’s a seller’s market.   We know that the best time to sell a house is in the spring.   It is also the best time to buy.   This has become common knowledge and a lot of people base their decisions on this.

If you were to expand your thinking in other areas and learn a bit more as to how the economy can have an effect on what you are thinking about doing it could help to lead you to positive decisions.

For example, if you know that the falling oil prices are going to continue for a period of time, then maybe now is the time to invest in something you really need for the home.   If indications are that it is going to be short lived then you may be better off to take any extra money you are saving and pay down your debt.

You don’t have to go out and become an economic expert or forecaster.   It just may mean listening to all of the news when it comes on at night.  We tend to focus on the bad happenings of the city, or the sports then turning the rest of it off.   Find some good resources that talk about the economy in a language that you can understand, and you may find that you are suddenly quite interested in economics.

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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