How the Canadian economy fares in the next year depends, as usual, on the US and a variety of global factors. Earl Sweet, managing director and senior economist, BMO Capital Markets, told the Canadian Association for Surface Finishing’s conference on November 18 that while there we should expect moderate improvement in 2016, “the risks are skewed to the downside.” These include: a hard landing or financial crisis in China as it reforms its markets; emerging markets being unable to service their debt and their heavily leveraged economies; disinflation morphing into outright deflation; and a re-ignition of European stresses, particularly around the euro. “To which we have to add geopolitical stresses intensifying,” he said. “There’s no shortage of those.” Demand and supply responses, he added, will re-balance the global oil market, though progress will be slow. There are signs Saudi Arabia and other Gulf countries are starting to show stress. There is waning commercial construction in Canada, with rising office vacancies and a lot of space available in Toronto. Demand for housing in Toronto will slow from 2016 to 2018, as rising supply meets slowing demand. However, Canadians have a very high rate of equity in their homes, which is a stabilizing factor. Motor vehicle sales, currently at peak levels in Canada and the US, will likely drop in 2016. Metal surface finishing markets have been struggling quite hard in recent years, and he said he believed there would be more tough slogging for another year or two. “Canadian growth will strengthen to 2.1 percent in 2016, supported by robust US growth and the low loonie,” he concluded. “And we don’t think the Bank of Canada will make any move on fiscal policy until early 2017.”