07:42 AM EST, 12/04/2024 (MT Newswires) -- Canadian labor productivity for Q3 is slated to be released at 8:30 a.m. Wednesday, noted Bank of Montreal (BMO).

The bank looks for labor productivity to dip 0.3% in Q3, leaving it roughly in line with year-ago levels. This release is expected to include upward revisions amid similar upgrades to real gross domestic product.

While productivity no longer looks to have been on a stagnant or declining path over the last few years, it continues to underperform relative to the United States, stated BMO. This gap will act as a headwind to attracting investment into Canada in an era of heightened trade risks.

Home sales data were out for Vancouver and Toronto for November in the past 24 hours, and both markets look steady, pointed out the bank. Toronto sales were up 40% from "very soft" year-ago levels, or modestly higher on a month-over-month basis. The sales-to-new listings ratio suggests a stable and loosely balanced market overall.

However, there are some clear performance differences showing below the surface based on market segment, with single-detached home prices outperforming condos. BMO continues to see a scarce supply of single-family homes relative to demand, but a wave of condo completions coming to market just as demand from investors and renters is backing off.

While the benchmark Toronto price was down 1.2% year over year in November, single-detached prices were down just 0.5% versus a 5.0% decline for apartment condos. The bank looks for this performance disparity to continue and remain a key feature in 2025.

S&P upgraded the Province of Ontario's credit rating to AA- late Tuesday, citing "better-than-expected economic growth in Ontario and solid budgetary execution against targets with a commitment to stay on its debt sustainability path." BMO said it had been bullish on Ontario relative to the provincial pack for these reasons for some time, and it's paying off with rating upgrades and the tightest long-term spread among the 10 provinces.

As of the mid-year fiscal update, Ontario was projecting a C$6.6 billion deficit for FY24/25, or roughly 0.6% of gross domestic product, notably smaller than the C$9.8 billion shortfall estimated in the initial budget plan, even after a strong dose of new spending measures. The net debt-to-GDP ratio is on track to dip below 37% after pushing north of 42% in FY20/21.

The Canadian dollar (CAD or loonie) is little changed at $1.406/USD early Wednesday, according to the bank.