The top panel shows Canadian Government Spending vs Labour Force Participation and the lower panel shows Canadian Jobs Added on an Annual Basis all since 2008.
The two biggest line items of Federal Government Expenditures as of 3Q 2014 are:
- Gross current expenditure on goods and services (63% of Total Expenditures, up 0.9% since 4Q 2011) and
- Current transfers to households (23% of Total Expenditures, up 0.7% since 4Q 2011)
- All other Federal Government Expenditures (14% of Total Expenditures since 4Q 2011) have dropped 1.5%
Government spending on itself and the household sector combined with ultra low borrowing rates have not yielded growth in Canadian Labour Force Participation.
Deutsche Bank reveals 7 reasons why ‘Canada is in serious trouble,’ starting with a 63% overvalued housing market. Financial Post, Business Insider, Andy Kiersz, January 8, 2015
If Treasury Yields are a measure of price and wage inflation, it's just not happening.