This could also affect the country’s vast energy interests and investments across the world with its African markets set to feel the pinch.
There are an estimated 155 Canadian companies with cumulative mining assets totalling more than 31.6 billion Canadian dollars operating in 39 countries in Africa in as of 2011. Though the country’s oil interests in Africa are relatively small, the trend is changing fast.
The energy sector accounts for about 10 per cent of gross domestic product, a quarter of exports, and a quarter of non-housing private investment.
“A persistent and large decline in oil prices is expected to dampen Canada’s growth, mainly through weaker investment in the energy sector, although the impact on oil production may be more muted given existing capacity and growing market share in the United States,” read the IMF’s country report.
“On the upside, lower oil prices are expected to benefit consumers and non-energy sectors, especially in the context of a weaker currency and stronger US growth.”
According to the report, lower oil prices will contribute to the necessary rebalancing of the economy also through the cooling impact on the most overheated housing markets.
“With the main engine of Canada’s recent growth—the energy sector—taking the hit, the economy’s ability to overcome longer-standing weaknesses in the non-energy sector by boosting its productivity will be increasingly important,” added the Fund.
“The economy has been expanding at an above-potential rate since 2013, with a growth rate of 2.4 per cent last year.”
The report also said the awaited pickup in exports, driven by a stronger U.S. recovery and a depreciating Canadian dollar was encouraging.