Canada's Q1 16 GDP growth is likely to be quite tepid

Canadian economy advanced only 1.2% in 2015, at almost half the pace posted in 2014. Growth is not nearly enough to assure adequate job creation. Canada's terms of trade (the price of exports relative to the price of imports) declined sharply, reflecting the sharp drop in oil prices and the surging price of imports.

Fiscal stimulus is likely at the March 22 budget which could mitigate the damage of the commodity price plunge. The Bank of Canada meets next Wednesday, and is largely expected to stay on hold.

The recovery in manufacturing is disappointingly slow and consumer spending remains weak on account of rising unemployment and record-high debt levels. This raises the chances for Canada's Q1 16 growth to be quite tepid.