How the Budget/GDP Fares

"While [Friday release] GDP report is a bit of a mixed bag, the bigger picture is that the Canadian economy looks to have had better momentum than widely appreciated through much of 2013."
"The firmer results leave a smaller output gap (the difference between potential and actual output) than the Bank of Canada estimated and likely further reduces the -- already remote -- odds of a rate cut."
Douglas Porter, chief economist BMO Capital Markets

"We normally look to December GDP by industry data to get a sense of what to expect for GDP in the coming quarter."
"Inclement weather will negatively depress the Q1 performance. What's more, the large stockpile of inventories will need to be depleted eventually, thereby limiting the rate of expansion."
"(But) if we step back from this quarterly perspective, the economic themes -- both here and abroad -- playing out indicate that 2014 is shaping up to be better than 2013."
Sonya Gulati, senior economist, TD Economics

"The combination of inclement weather and a likely reduction in inventories sets up for the pace of growth to temporarily slow in the first quarter. That said, government spending is likely to recover from Q4's (partial government) shutdown-related drop, while the solid momentum in consumer spending is likely to be maintained."
Dawn Desjardins, RBC Economics

Canada came out of 2013 with its economy bustling. That's the good news. That, on top of Prime Minister Stephen Harper's successful conclusion of a Canada-European-Union free trade agreement and more to come on the Asia Pacific side, along with the country's stronger-than-other-G8 economic performances makes for some pretty optimistic predictions.

On the other hand, our biggest trading partner is still in the doldrums.

The United States' economic picture ended the year gloomier than predicted. And that has in the past and will continue well into the future despite our growing trade diversification and less dependency on our neighbour, continue to impact deleteriously on Canada. No matter how much Canada can enjoy free trade agreements with foreign countries, it's the one right at our doorstep with whom we are interrelated industrially and where most of our exports go, that counts the most.

Meanwhile, Canada's gross domestic product, representing the widest measurement of economic performance, grew at an annualized 2.9 percent in the last quarter of 2013 according to that super-secure-statistics source, Statistics Canada. Upward revisions for two of the previous three quarters came along with the good news released on Friday. A weaker 2.5 percent had been anticipated by economists in the fourth quarter.

The average forecast was around 1.7 percent for all of 2013, but a it turns out the GDP grew two percent for all of 2013. We're doing just fine, thank you very much. Even Finance Minister Jim Flaherty had low-balled his prediction at 2.3 percent for 2014 in his February 11 budget, but it's now been upgraded to 2.5 percent, in lock-step with the Conservative government's plan to eliminate its budget deficit for 2015.