#2248562 - 06/10/08 10:44 AM
Canadian Economy!
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n007
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While there are certainly econmic problems within Canada i.e. the forestry and manufacturing sectors, on a worldwide comparison we seem to be doing overall better than most.
Tuesday, June 10, 2008
Presented by
Canada cited as bright spot in tough global economy
Sean Silcoff, Financial Post
Published: Tuesday, June 10, 2008
Getty
MONTREAL -- The solid state of Canada's economy and financial system emerged Monday as one of the few positives as an international economic conference kicked off amid growing concerns about the global financial crisis and inflationary pressures from rising oil and other commodity prices.
"Today we may be at the start of a cycle in the world economy where there is less growth and more inflationary pressures," Christian Noyer, governor of the Bank of France, said in an interview at The International Economic Forum of the Americas here. "That is more difficult for central bankers to deal with than in the past when inflationary pressures were lower."
Speakers, including former U.S. Federal Reserve chairman Paul Volcker, Royal Bank of Canada chief operating officer Barbara Stymiest and International Monetary Fund head Dominique Strauss-Kahn highlighted the challenges facing central banks and governments as they try to steer to safety from the financial crisis while aiming to keep inflation low.
"The role of modern finance requires a rethinking of financial regulations and the role and shaping of natural supervisory regulatory institutions," said Mr. Volcker, the man credited with taming double-digit inflation in the U.S. a generation ago by driving up interest rates. "That is not going to be an easy job ... We're a long way from broadly accepted conclusions," he said, adding unregulated players will resist having oversight foisted upon them.
Ms. Stymiest warned the global economy is "at a delicate juncture" and that banks and governments must not overreact and create a new set of unforeseen problems down the road.
Mr. Strauss-Kahn, meanwhile, said central banks find themselves "between fire and ice" dealing with opposing forces – price pressure and economic slowdown -- some fear could lead to crippling stagflation. He said the IMF foresees a period of zero growth in the U.S. through to the end of 2009: "For a long time the U.S. is going to have a very, very low growth rate."
Amid the gloom, however, Canada got upbeat reviews. Mr. Strauss-Kahn said while "the Canadian economy cannot be immune to the crisis," he added the country, thanks in part to its healthy financial institutions, has earned a "rather optimistic" outlook from the IMF, with forecast GDP growth of between 1% and 2% in 2008 and 2009, down a bit from forecasts in April.
Mr. Volcker followed an enthusiastic speech by federal finance minister Jim Flaherty about Canada's economy by saying it left him "shrinking" in his seat. "Budget surpluses as far as the eye can see. He's got balance of payment surpluses. He's a huge energy producer, ... He has a growing economy. I can't describe our economy that way.
"All I can say is, whatever he says, I'm bigger than he is" the 6-foot 7-inch Mr. Volcker said of Mr. Flaherty, who stands a full foot shorter.
However, Mr. Flaherty and others agreed Canada is not immune to inflation pressures. The Canadian central bank gave the market a surprise on Tuesday as it left a key interest rate unchanged amid inflation worries.
Financial Post
ssilcoff nationalpost.com
Copyright © 2007 CanWest Interactive, a division of CanWest MediaWorks Publications, Inc.. All rights reserved.
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#2249403 - 06/10/08 06:51 PM
Re: Canadian Economy!
[Re: n007]
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downwindtracker2
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Registered: 05/27/01
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Except for forest industry and manufacturing.One is dead and the other is in serious trouble.
Our banking system was set up to avoid the problems that the US had in the 30s,it should survive.
Most of the budget credit goes to the Liberals.The conservatives haven't screwed it up too badly,yet.
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#2249408 - 06/10/08 06:55 PM
Re: Canadian Economy!
[Re: downwindtracker2]
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BCBrian
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How the hell does the "budget credit" go to - the Liberals?!
I can't figure how they get the credit.
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Brian
Vernon BC Canada
"Dance like nobody's watching. Love like you've never been hurt. Sing like nobody's listening. Live like it's heaven on earth." Mark Twain
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#2250064 - 06/11/08 06:54 AM
Re: Canadian Economy!
[Re: BCBrian]
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CanuckShooter
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Registered: 02/22/07
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It's because the Liberals want to ban firearms... it creates upward pressure on the Canadian economy which in turn amasses huge profits in the energy, banking, and insurance sectors...which in turn stimulates dumbazzes to attribute manipulated financials as something improved by some windbags in Ottawa. Ujalstand now???
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#2250270 - 06/11/08 08:42 AM
Re: Canadian Economy!
[Re: CanuckShooter]
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MightyPeace
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Registered: 05/23/07
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Economy in the east is hurting but the west is thriving. My opinion, screw the east b/c they never cared for us before and now we are seeing tremendous growth and with the Canadian dollar high it hurts the manufacturing sector. The east will just get handouts from the federal govt anyways...its where all the votes come from! Its too bad the US economy is in the tank b/c it is hurting the forestry sector with lumber exports for new homes, which hurts our saw mills.
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#2250278 - 06/11/08 08:47 AM
Re: Canadian Economy!
[Re: BCBrian]
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n007
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Registered: 12/19/02
Posts: 576
Loc: Victoria, BC, Canada
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How the hell does the "budget credit" go to - the Liberals?!
I can't figure how they get the credit.
Surely you remeber the increasing deficits and debt under Mulroney. Wether you like the liberals or not it was the Chretien government that turned things around. Downloading to the provinces was a big part of their plan, but it was the liberals that started producing the surplus's that then were used to start paying down the debt. The conservatives under Harper have bacially followed the liberals lead. I know that you can argue that it was the liberals that started the deficit/debt fiasco in the 70's but the conservatives turned it into a potential economic disaster in the 80's and 90's that the liberals had no choice but to deal with it.
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#2251345 - 06/11/08 06:21 PM
Re: Canadian Economy!
[Re: n007]
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downwindtracker2
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You said it much better than I could.
I remember a column by Bruce Hutchinson,editor of the Vancouver Sun warning about the grave danger to the social contract of Trudeau's deficet.Bruce was a liberal and even maybe a Liberal.I thought he was nuts,boy was I wrong.
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You can hunt longer with wind at your back
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#2251392 - 06/11/08 06:45 PM
Re: Canadian Economy!
[Re: n007]
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stubblejumper
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Registered: 07/26/03
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Alberta's oil is keeping our economy going.As long as the oil prices stay high,we should be able to avoid a recession.
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#2252185 - 06/12/08 07:47 AM
Re: Canadian Economy!
[Re: n007]
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CanuckShooter
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Registered: 02/22/07
Posts: 294
Loc: British Columbia Canada
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Surely you remeber the increasing deficits and debt under Mulroney. Wether you like the liberals or not it was the Chretien government that turned things around. Downloading to the provinces was a big part of their plan, but it was the liberals that started producing the surplus's that then were used to start paying down the debt. The conservatives under Harper have bacially followed the liberals lead. I know that you can argue that it was the liberals that started the deficit/debt fiasco in the 70's but the conservatives turned it into a potential economic disaster in the 80's and 90's that the liberals had no choice but to deal with it.
Your buying into the popular media spin, what they call a deficit is/was in fact an investment in our future. Much like when you go into a deficit to buy a house, your investment will pay off in the long run when your initial 'going into debt' is outstripped by your capital appreciation.
Everyone knows that you can make the most money by investing the money of others it's called using leverage...and that is what our governments of the past were doing...leveraging us into a rosier financial future.
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#2252389 - 06/12/08 09:42 AM
Re: Canadian Economy!
[Re: CanuckShooter]
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378Canuck
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Oil and Gas sales to USA will not sustain Canada. You need a little more than that to keep the economy wheel turning. You omitted probably the most important spoke in the wheel and that is food production of all genre. Take countries like Libya, Algeria, Egypt and even the Saudi oil barons, all need to eat.(These countries import almost all their foods). Take Venezuela for instance, when the oil rigs came to their country everyone ran to big dollars and dropped the agricultural tools, they overnight became an importer of food rather than an exporter. When food prices hit a fourfold increase in 5 years we can have this discussion again. Now there going to take a beating at the grocery store and the lower half or poor will be undernourished which will hit hard on their medical program.
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#2253268 - 06/12/08 05:34 PM
Re: Canadian Economy!
[Re: CanuckShooter]
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downwindtracker2
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There's a big difference between buying a house and running up your credit cards.
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You can hunt longer with wind at your back
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#2253588 - 06/12/08 08:25 PM
Re: Canadian Economy!
[Re: downwindtracker2]
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Tony
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I have made a fair chunk of change investing up here since I arrived in late 2004. And not just in oil. Prior to moving here I never considered Canadian investments.
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#2254153 - 06/13/08 07:57 AM
Re: Canadian Economy!
[Re: 378Canuck]
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n007
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Registered: 12/19/02
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So far we are escaping from the worst of the food inflation affecting the rest of the world, hope it lasts. Canada produces about 70% of the food it consumes. Canada could actually benefit from the worldwide increase in food prices. I do agree with you 100% that oil is not going to carry us through, healthy manufacturing/construction/high tech industries with high paying jobs in conjunction with high commodity prices is what it will take for Canada to remain isolated from a recession.
Strong dollar saves consumers from worldwide inflation
Exports boom on high food pricesPAUL WALDIE
June 13, 2008
Canadians may grumble about the price of some of the food they buy, but a new study says consumers aren't being hurt that badly and the country as a whole is making a killing off of the rising price of food.
Food prices for Canadians increased just 1.2 per cent during the 12 months ended April 30, according to a Statistics Canada study released yesterday. By contrast, prices jumped nearly 6 per cent in the United States and 7 per cent in Europe.
Meanwhile, Canadian agricultural exports have been running at all-time highs and the country is on track to post a record $11-billion trade surplus in agricultural goods this year, the study found. That's largely due to soaring prices for wheat and canola.
"On the one hand, consumers don't seem to be too adversely affected by higher prices for some commodities because prices are falling for others," said Philip Cross, who co-authored the study. "While the consumer is insulated from the worst of these increases, the producer stands to gain enormously."
Consumers have benefited largely from the strengthening Canadian dollar, which has cut the cost of many imports. For example, the study said the price of vegetables has dropped 13 per cent while the cost of fruit is down 4 per cent. Roughly 40 per cent of all fruits and vegetables bought by Canadians are imported.
Consumers are paying about 10 per cent more for bread and cereals, reflecting rising grain prices, but those items account for just 12 per cent of total food purchases. Canadians spend far more on meat, fruits and vegetables, which have dropped in price. Total food purchases stood at around $74-billion last year.
While Canadians don't consume many bread products, others around the world do and Canada's grain exports have been booming. Roughly 80 per cent of the wheat grown in Canada is exported and wheat prices on the Chicago Board of Trade have climbed about 50 per cent in the past year.
Mr. Cross said consumers will still be relatively insulated from food inflation even if the dollar remains stable, as expected. While that could cause some imports to rise in price, the impact will be gradual, he said. And, he noted that the price of other commodities has started to drop. For example, wheat prices have fallen 36 per cent since hitting a record high in February. Farmers have also planted more wheat and canola this year, and yesterday the Canadian Wheat Board said it is expecting a decent crop.
"It's quite possible that the price of imported fruits and vegetables will not fall 13 per cent again in the next year," Mr. Cross said. "But it's also quite possible that the price of bread and cereals won't rise 10 per cent in the next year, either."
Rising oil prices could drive up some food costs, he said. But energy accounts for just 5 per cent of the cost of food, so the impact will be slight.
Even if prices rise, the study said consumers will have room to substitute for other, less expensive products. It noted that consumers have reacted quickly to price changes in the past. For example, when coffee prices doubled in the 1970s, consumption fell 20 per cent.
In a report earlier this year, Avery Shenfeld, an economist at CIBC World Markets, said food inflation could jump to 3.5 per cent next year from roughly zero today.
Yesterday, Mr. Shenfeld said Canada has benefited over all from rising food prices. He noted that while the amount of goods Canada produced actually fell in the first quarter of this year, the value of those goods soared, mainly because of rising commodity prices. As a result, household incomes have increased.
"Canadian incomes benefit when resources prices and food prices rise," he said.
One concern, though, is that the Bank of Canada has become worried about inflation and could start raising interest rates.
"Canadians may like the incomes associated with higher food prices but they may not like the rate hikes that go along with it," Mr. Shenfeld said.
Foodflation
Compared to other locales, Canada's food prices have remained relatively stable. When broken down, breads and cereals have had the largest price jump in Canada
Overall food price increase
12 months ended April, 2008
Canada 1.2%
U.S. 5.9
E.U. 7.1
China 22
DAIRY Up 3.4%
VEGETABLE Down 13%
FRUIT Down 4%
BREAD AND CEREALS Up 10%
MEAT AND FISH unchanged
2007 trade surplus
$50-billion
Energy sector
$30-billion
Forestry sector
$25-billion
Metals/mining sector
$9-billion
Agriculture sector
Source: Statistics Canada
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#2254255 - 06/13/08 09:00 AM
Re: Canadian Economy!
[Re: CanuckShooter]
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n007
Campfire Regular
Registered: 12/19/02
Posts: 576
Loc: Victoria, BC, Canada
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Surely you remeber the increasing deficits and debt under Mulroney. Wether you like the liberals or not it was the Chretien government that turned things around. Downloading to the provinces was a big part of their plan, but it was the liberals that started producing the surplus's that then were used to start paying down the debt. The conservatives under Harper have bacially followed the liberals lead. I know that you can argue that it was the liberals that started the deficit/debt fiasco in the 70's but the conservatives turned it into a potential economic disaster in the 80's and 90's that the liberals had no choice but to deal with it. [/quote
Your buying into the popular media spin, what they call a deficit is/was in fact an investment in our future. Much like when you go into a deficit to buy a house, your investment will pay off in the long run when your initial 'going into debt' is outstripped by your capital appreciation.
Everyone knows that you can make the most money by investing the money of others it's called using leverage...and that is what our governments of the past were doing...leveraging us into a rosier financial future.
You must have some pretty good rose coloured glasses to see increased deficits and debt as a good thing. In the the 1990's Canada was going nowhere but bankrupt. It had a deficit of $42 billion which was added annually to our debt which was at $583 billion, which meant that we had a debt to GDP ration of 75%. The debt to GDP ratio had been increasing for 25 years, and that is not a good thing. It took 5-6years of cuts and tax increases to get the deficit to "0". Then we could start paying down the debt, which by 2006 gave us a debt to GDP ratio of 35%, and must be lower by now, that is a good thing. We went from the highest debt to GDP ratio amongst the G8 to the lowest, in about 14 years, impressive by any standard. The less money that goes to paying debt charges is more money availabe for tax cuts or increased program spending. When I borrow money to make money,doesnt matter, real estate/stocks/a business the assests that I purchase with that borrowed money have to increase in value more than the carrying charges otherwise it makes no sense, just increased debt. Canada in the 1990's was increasing deficits to pay debt which increased deficits which increased debt etc. Canada was not purchasing any increasing assets we were servicing debt. If increasing debts and deficits leads to a rosier future then all those indebted 3rd world countries must be looking at a veritable rose garden in the next decade.
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#2254308 - 06/13/08 09:27 AM
Re: Canadian Economy!
[Re: n007]
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n007
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I just found out that Canada's Debt to GDP ratio is expected to be 23.2% in 2008.
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#2254315 - 06/13/08 09:30 AM
Re: Canadian Economy!
[Re: n007]
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n007
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I just found out that Canada's Debt to GDP ratio is expected to be 23.2% in 2008.
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#2258527 - 06/16/08 06:44 AM
Re: Canadian Economy!
[Re: n007]
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CanuckShooter
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Registered: 02/22/07
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This question of a countries debt has always caught my interest...for example if most of the major countries [if not all] have a national debt..who the hell do they owe all this money too??
If our country is carrying debt, then why are we making huge cash donations to China [for disaster relief], to the Palistenian Authority [to buy off Arafat?], to Afghanastan to fix their country while our infrastructure is falling apart??
Rose coloured glasses? Well if you consider the province that offers tax incentives to major companies and goes into debt building infrastructure [a longterm deficit]to attract industrial development. You will see that after going into that debt new businesses come to the province, which in turn brings more new money, more people, and more tax revenue...which in turn can be used to pay down the debt. The problem arises when successive governments think they are the saviours of the world and take the money that should be used to pay down the debt and give it away for political purposes. Heck even in our little hick city they will tell you that in order to attract 'good' professional people [ie doctors]you have to spend money on infrastructure that will attract them like, play houses, art galleries, museums etc otherwise they will not move here to live and our city will not grow, businesses will be attracted to other cities that offer these amenities first.
When you quote the GDP your playing with statistics that govts love to bandy around as facts when in fact they manipulate all of these figures to suit themselves. If they wanted to pay off the debt all they would have to do is print the money and pay them off...and then our currency would devalue...which would attract business investment into our country because profit margins would be larger, labour would be cheaper etc. Our forest industry is in a shambles now because of the high Canadian dollar [as an example]they cannot maintain suitable profit margins with an inflated dollar...which also keeps tourists at bay.
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#2259937 - 06/17/08 03:33 AM
Re: Canadian Economy!
[Re: CanuckShooter]
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378Canuck
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Our Canadian dollar is not any higher to Asian currencies, basically only to the US dollar. The US dollar goes down in value, doesn´t mean the Canadian is going up. It really hasn´t moved at all.
When you set your butt on a toilet, does it mean the toilet came up or your butt went down? LOL
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