Canada column for Sunday, May 29/16
THE CANADIAN REPORT
(c) By Jim Fox
The oil price shock has been compounded by this month’s devastating Alberta wildfires to hurt Canada’s economic growth.
The Bank of Canada said the fires that destroyed sections of Fort McMurray, forcing about 80,000 to flee and with the loss of 2,400 houses and businesses, are exacting a toll on the economy.
In the oil-rich province, the flames forced several oilsands operations to close and sent workers fleeing.
The central bank said the impact of the fires will cut 1.25 percent off Gross Domestic Product growth in the second quarter.
Even so, the bank kept its key interest rate steady at 0.5 percent, expecting better days ahead.
In its assessment, the bank said Canada’s economy is expected to rebound in the third quarter as oil production resumes along with rebuilding after the fires.
The economy continues making a “structural adjustment” to lower world oil prices, the bank noted.
Retail sales figures for March along with manufacturing and wholesale numbers were lower.
Statistics Canada said the annual pace of inflation rose to 1.7 percent last month, up from 1.3 percent in March.