01/01/2024
Five things to watch for in Canadian business in 2024
1. Inflation and interest rates: Economists expect inflation to continue slowing, but the Bank of Canada has continued to emphasize that it's prepared to raise rates again if necessary. CIBC deputy chief economist Benjamin Tal said inflation was expected to cool in 2023, but the cost of services has proved to be “stickier” than predicted. For 2024, he said higher interest rates will take their toll.
2. Housing: A report by RBC assistant chief economist Robert Hogue and research associate Ben Richardson expects governments to address the supply gap and reduce obstacles in the way of new housing, while lower interest rates in the second half of the year will help improve affordability, but not by much. The national average home price is forecast to gain 1.5 per cent from 2023 to 2024, coming in at $690,916.
3. Markets: The S&P/TSX composite is on track to post a gain for 2023 after a rally that began in late October. The market gathered steam after U.S. Federal Reserve chair Jerome Powell left traders banking on rate cuts in 2024. Invesco chief global market strategist Kristina Hooper said 2023 was a bumpy and volatile year, but it is going to end on a high note. Lori Norman, investor specialist at Steady hand Investment Funds Inc., says we are likely headed into a more normalized interest rate environment in 2024. And while the Bank of Canada might cut rates next year, she warned the days of near-zero interest rates are not coming back.
4. Energy sector: Ottawa is expected to publish draft regulations by mid-2024 for its proposed national cap-and-trade system for greenhouse gas pollution, with the final regulations expected in 2025. A draft framework released this month would see the oil and gas industry cut emissions by more than one-third by 2030 or buy offset credits.
5. Artificial intelligence: ChatGPT debuted in late 2022 and grew in popularity in 2023 as people experimented with generative artificial intelligence, getting a glimpse of its potential uses for work and play. “Some organizations are saying, 'Don't you dare use these tools.' Other organizations are saying, 'How can we use these tools, how can
