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Sunday, July 5, 2015

Canada's not heading for a recession: Finance Minister Joe Oliver says

   Canada column for Sunday, July 5/15

   (c) By Jim Fox

   The Canadian government begs to differ with a Bank of America economist’s suggestion that the country is in recession and faces a plunging dollar.
   Finance Minister Joe Oliver said the economy will avoid a recession even as the Gross Domestic Product has declined from January through April.
   Instead, Canada expects “solid growth” after a weak first quarter, he said. 
   U.S. economist Emanuella Enenajor said the recession has begun with a shrinking number of Canadian factories and the impact of the falling price of oil, a major Canadian commodity.
   She expects the Bank of Canada to cut interest rates again, possibly at its next setting on July 15, to avert any slowdown.
   Canadian Imperial Bank of Commerce economist Andrew Grantham said technically the country can be considered in a recession now but Bank of Montreal economist Doug Porter calls it a “sluggish economy, not one in recession.”
   Enenajor predicts the Canadian dollar will fall to below 77 cents U.S. this year after dipping below 80 cents now.


   Along with a lot of flag waving at Canada Day ceremonies on July 1, federal leaders were priming their political messages in advance of the October election.
   “In times of never-ending economic and political turmoil in the world, our Canada is an island of stability,” Prime Minister Stephen Harper said at events in Ottawa to mark the country’s 148th birthday.
   Liberal leader Justin Trudeau and New Democratic Party’s Tom Mulcair spent the day in the Toronto area.
   “We have many reasons to be proud to be Canadian, but much work remains to be done,” said Mulcair who is leading in the opinion polls.
   “Canada is a place of fairness and of opportunity; a place where people from every imaginable country and culture, who speak every language, live and work, and build and thrive together,” Trudeau said.
   News in brief:
   - Paul Bernardo, called Canada’s most-notorious murderer and rapist, has applied for day parole. He was convicted 20 years ago of murdering Ontario teenagers Leslie Mahaffy and Kristen French, and confessed to raping 14 women. Attorney Daniel Brown said chances of release from jail now or in the future are “slim.”
   - For the fifth time in a week, a WestJet flight has received a bomb-threat hoax. The latest was a flight from Las Vegas that landed safely in Victoria. No explosives were found on any of the aircraft, but six passengers were injured during an emergency evacuation of a flight in Winnipeg.


   Facts and figures:
   Canada’s dollar has dropped to 79.60 cents U.S. while the U.S. dollar returns $1.2561 in Canadian funds, before bank exchange fees.
   The Bank of Canada’s key interest rate is steady at 0.75 percent while the prime-lending rate is 2.85 percent.
   Markets are lower with the Toronto Stock Exchange index at 14,655 points and the TSX Venture index 670 points.
   The average price of gas is higher at a national average of $1.187 a liter or $4.512 (Canadian) for a U.S. gallon.
   Lotto 6/49: (July 1) 21, 29, 32, 40, 43 and 44; bonus 19. (June 27) 7, 15, 27, 31, 35 and 44; bonus 2. Lotto Max: (June 26) 2, 4, 16, 23, 30, 32 and 46; bonus 38.


   Regional briefs:
   - More than 5,000 people have been forced from their homes by forest fires in northern Saskatchewan. The evacuations involve 51 communities around La Ronge and La Loche. Firefighters have kept the flames away from the communities as they reached the edges of Montreal Lake and Weyakwin.
   - Former Toronto mayor Rob Ford, who is recovering from cancer surgery, has been given the OK to return to work. Ford, 46, now a councilor, said he was cleared by doctors to work one or two days a week initially. The controversial Ford made international headlines after admitting to drug and alcohol issues. Health problems forced him to drop out of the mayoralty race last fall.
   - Doom and gloom over low prices in the Alberta oil patch have somewhat dampened celebrations at this year’s Calgary Stampede. Energy companies have cut back on spending for big events and parties while spending is also down on the stampede grounds as the show continues until July 12.


Jim Fox can be reached at canadareport@hotmail.com

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