Five fearless forecasts for 2022

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Andrea Horwath

Prediction number four: following another electoral defeat in June, the 2022 provincial election will be Andrea Horwath’s last as leader of the Ontario NDP. Photo credit: The Canadian Press/Chris Young

 

‘Tis the season for predictions, and as an economist and political junkie I can’t resist the urge. Here are five shots in the dark on some topics that are bound to hit the headlines in 2022.  

  • The pandemic will finally peter out in the second half of 2022, and be relegated to similar status as the flu with a recommended annual vaccine shot and seasonal surges. Many of the medical professionals who achieved rock star status because of their daily appearances in the media during the pandemic will suffer serious withdrawal as public attention is reduced. Unfortunately, many of the divisive forces unleashed by the pandemic between the vaccinated and the unvaxxed, the “government can do no wrong” crowd and the libertarians and divisions among various parts of the country will persist and make for some ugly politics in the coming year.   


  • The Canadian economy will technically recover from the pandemic losses in GDP and employment, but very slow growth expectations for the coming years will constrain the ability of average Canadians to get ahead. Although supply chain pressures will be resolved throughout 2022, inflation in Canada will continue to run hot because of the Trudeau government’s inability to rein in spending and the implementation of a number of tax hikes on carbon, EI, CPP and alcoholic beverages, among other things. Predictions from a number of international agencies such as the OECD and the World Bank anticipate that Canada will underperform most developed countries with GDP increases of less than two per cent annually. This will lead to the perfect storm of bad economic trends – stagflation. As a result, many Canadians will finally become fed up with the economic mismanagement of the Trudeau government. Given the support of the minority Liberals by the NDP, however, and the fact that the next election is likely at least two years away, they will not be able to do much about it anytime soon.


  • The housing market in Canada will remain out of reach for many Canadians, with average prices reaching new record levels. Although the Bank of Canada will implement several interest rate increases, the hikes will be too small to have a major impact in dampening demand. The federal Liberal government’s determination to increase immigration levels to record levels will ensure demand for housing continues to be robust while the impact of the environmental lobby discourages the building of more housing in so-called “green belt” areas, which constitutes most of the land in extended urban areas where the need for new housing is most acute. In addition, foolish government policies to permit even more tax breaks and other incentives for first-time home buyers will merely make the problem worse. 


  • The Ontario Progressive Conservatives will win a second majority government in Ontario, with a much slimmer majority than they won in 2018. The Liberals will pick up some seats from their record low seven seat total in the previous election, but will not unseat the NDP as the official opposition. Andrea Horwath will try to hang on as NDP leader but after four losing elections there will be considerable pressure in her party to elect a new leader. As a result, the 2022 election will be the last one that Horwath will contest as leader.


  • The international tide will increasingly turn against China as that country’s aggressive military and abysmal human rights conduct becomes more hard line. Even China-dictatorship-loving Justin Trudeau recently made a mildly anti-China statement calling for the Western world to unite in its condemnation of China’s many egregious actions in Hong Kong, Taiwan, in the South China Sea, continued oppression of the Uighurs and other unacceptable actions. Mind you, the Trudeau government still has not banned Huawei from Canada’s 5G network even though all of its Five Eyes allies (US, Australia, UK, New Zealand) have done so. Despite China’s best efforts to sanitize the games, the Beijing Olympics will end up being cancelled because of pervasive Omicron infection. Considering China’s track record of being anything but transparent about the many dangerous viruses that have originated in that country over the years, losing the Olympics will serve them right.  

A recent public opinion poll showed that Canadians were surprisingly optimistic about their prospects for 2022 – surprising considering that everyone is pretty burned out after two years of pandemic and all of the negatives it has wrought. Let’s hope that is prescient as another year of this punishment may be more than many of us can endure. 

It should be said that most forecasters do not revisit their forecasts to see if they were anywhere near close. There’s a good reason for that of course, as predicting the future is an endeavour more prone to failure than not. But as always, I promise to review my forecasts a year hence to see how far off they were. In the interim, Happy New Year and fingers crossed for the year ahead. 

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