Canada
column for Sunday, Nov. 18/12
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THE CANADIAN REPORT
(c) By
Jim Fox
Canadians could follow the United States in a plunge over the so-called
fiscal cliff in January, Bank of Canada Governor Mark Carney warns.
Extending U.S. tax cuts and spending beyond the end of this year is the
“most imminent threat” facing Canada’s economy, the head of the central bank
said.
There’s concern by economists that without political cooperation in the
U.S. on a new budget arrangement about $600 billion in tax cuts and spending
will end abruptly.
This could rob the U.S. economy of about four percentage points in
growth and push the country into a recession that the Canadian economy would be
sure to follow, said Finance Minister Jim Flaherty.
Carney
and Flaherty have pledged to take action to support the Canadian economy if a
shock from the U.S. or Europe again threatens to plunge the country into a recession.
How U.S. policy-makers deal with the threat highlighted concerns among
the world’s economic leaders attending the G20 meeting last weekend in Mexico,
Flaherty said.