Canada column for Sunday, Aug. 14/11
THE CANADIAN REPORT
(c) By Jim Fox
Economists say Canada will be unable to escape the shadow of its massive trading partner and neighbor to the south in any world economic upheaval.
In a “misery-loves-company” scenario, BMO Financial Group has positioned Canada squarely behind the United States by cutting its North American economic growth forecasts for the second time in two weeks.
“We do not believe there will be another recession in the U.S. economy,” BMO chief economist Sherry Cooper said.
She suggested that economic growth will be 1.7 percent, down from 2.5 percent projected earlier for this year.
With the U.S. being Canada’s biggest trading partner, this country’s Gross Domestic Product will now only top out at 2.4 percent, due to a robust first quarter.
Canada’s jobless rate will rise to 7.3 percent but fall back to 7 percent by the end of next year compared with about 9 percent and 8.5 percent, respectively, in the U.S., BMO said.
The decision by the U.S. Federal Reserve to leave interest rates low, along with the world economic situation, appears likely to force the Bank of Canada to do the same for now.
The bank had indicated earlier that interest rates would likely start increasing in the fall.
A second prominent Canadian political leader has had to step aside due to a fight against cancer.
Yvonne Jones, leader of Newfoundland and Labrador’s Liberal party, said her year-long battle against breast cancer has robbed her of the energy need to contest the provincial election in October.
“I am feeling cheated by cancer from doing something that I have dreamed of doing my entire political life,” she said.
Conservative Premier Kathy Dunderdale gave Jones her best wishes as the Liberals prepare to appoint a new leader.
Last month, national New Democratic Party leader Jack Layton said he was temporarily stepping down to fight a recurrence of cancer.
News in brief:
- Prices for new houses across Canada continue to rise for the 18th consecutive month. Statistics Canada said prices rose 0.3 percent in June and 0.4 percent in May, with the largest gains in Toronto and suburban Oshawa followed by Winnipeg. Calgary dropped 0.3 percent and Victoria prices were off by 1.7 percent
- The Ontario Liberal government plans a “service guarantee” if re-elected on Oct. 6. The Liberals will refund fees to anyone having to wait more than 20 minutes at government-run centers. This would be for services such as renewing a driver’s license, changing an address, applying for a birth certificate and registering a business. Premier Dalton McGuinty also said GO Train commuters will get refunds if they are more than 15 minutes late.
After a rough ride, the Toronto Stock Exchange rebounded, gaining more than two percent as the composite index shot up 340 points on Thursday.
The exchange index reached 12,518 points by Friday while the TSX Venture Exchange was 1,813 points.
Signals that Canada won’t raise interest rates soon pulled the Canadian dollar lower to $1.0096 U.S. while the U.S. greenback was worth 99.05 cents Canadian, before bank exchange fees.
The Bank of Canada's key interest rate remains at 1 percent while the prime lending rate is 3 percent.
Lotto 6-49: (Wednesday) 9, 18, 24, 27, 29 and 43; bonus 5. (Aug. 6) 9, 21, 28, 31, 34 and 37; bonus 2. Lotto Max: (Aug. 5) 11, 17, 18, 20, 22, 29 and 45; bonus 27.
- Edra Ferguson at 104 is the oldest person to be awarded the Order of Canada recognizing contributions to society. She was one of the first women to attend law school in the 1920s, was the first female city councilor in St. Thomas, Ontario, the first judge of the Ontario Division Court, first to organize Ontario’s blood donor clinics and the first woman to serve on the Senate of the University of Western Ontario.
- The same day that 18 employees of SMART Technologies in Ottawa received layoff notices, they hit the jackpot in Lotto 6-49, winning $7,077, 095. Their tax-free windfall, amounting to about $393,172 each, couldn’t have come at a better time, said Colin Willard, one of the winners. The high-tech company will cut 200 jobs and move production to Mexico in the next six months.
Jim Fox can be reached at firstname.lastname@example.org