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Economic stimulus will increase debt

The Canadian government is looking at running up a budget deficit of $24.5-billion (U.S.) or more to ease Canada through the economic crisis.

After 12 consecutive years of budget surpluses and paying down the national debt, the government faces a $4.1-billion shortfall in each of the next two years — before any new spending as an economic stimulus.

Prime Minister Stephen Harper predicted the "kind of stimulus our economy is going to need" could result in the much-higher number.

The proposed stimulus package — including billions for the Canadian auto industry to work alongside a U.S. bailout — could undermine the threat by opposition parties to vote down the Conservative government next month over lack of a comprehensive plan.

Finance Minister Jim Flaherty has created a 12-person economic council headed by former British Columbia Finance Minister Carole Taylor to advise the government through the "difficult" times.

Flaherty and Bank of Canada Governor Mark Carney will meet with the heads of the largest banks to ensure steps are taken to make more credit available.

Radler paroled

David Radler, the former Hollinger newspaper executive sent to prison for aiding press baron Conrad Black in a multimillion-dollar swindle, has been granted full parole from a British Columbia prison.

A Canadian, Radler, 65, was sentenced in Pennsylvania to 29 months in a U.S. federal jail but was released after serving less than a year.

He was transferred in September to a Canadian prison and released after the parole board said he is a nonviolent offender with no prior convictions.

The Montreal-born Black, 64, is serving a 6 1/2-year term in a Florida prison for fraud.

Names in the news

• Quebec Premier Jean Charest named a 26-member Cabinet, up from 18, after his Liberals were easily re-elected. Charest said the Cabinet, with an equal number of men and women, has a "very solid foundation" of stability and experience. It includes returning Deputy Premier Claude Bechard, Monique Jerome-Forget, Yves Bolduc and Nathalie Normandeau.

• Pierre Karl Peladeau, head of Sun Media for one month, made a major restructuring for owner Quebecor and laid off 600 workers at newspapers across Canada. That will reduce the work force by 10 percent and followed cutbacks two years ago.

• Ontario Provincial Police Constable Laurie Hawkins, 41, of Woodstock, Ontario, died of carbon-monoxide poisoning caused by a malfunctioning fireplace. She died a week after the bodies of her husband Richard, 40, daughter Cassandra, 14, and son Jordan, 12, were found in the home that was filled with the tasteless, odorless gas.

Facts and figures

Canada's annual inflation rate dipped last month to 2 percent, from 2.6 percent a month earlier, because of a steep drop in gas prices that was moderated by higher grocery prices.

The dollar headed higher, returning 82.84 cents U.S. Friday while the U.S. dollar was $1.222 Canadian, before exchange fees.

The Bank of Canada's key interest rate is unchanged at 1.5 percent while the prime lending rate is 3.5 percent.

After closing Wednesday over a technical glitch, the Toronto Stock Exchange composite index was higher Friday at 8,481 points while the TSX Venture exchange index was higher at 697 points.

Lotto 6-49: (Wednesday) 11, 18, 22, 28, 30, 49; bonus 25. (Dec. 13) 4, 15, 34, 36, 43, 47; bonus 9. Super 7: (Dec. 12) 1, 13, 23, 27, 34, 36, 37; bonus 39.

Regional briefs

• An undetected buildup of ice snapped a ski lift tower in Whistler, British Columbia, leaving 53 skiers and snowboarders trapped inside gondola cars. Twelve people were slightly injured in the Excalibur Gondola collapse. In 1995, two people were killed and nine injured in a crash at Whistler's Quicksilver ski lift.

• Fire destroyed the Humane Society of Durham Region, in Oshawa, Ontario, killing 150 cats, two dogs and 40 smaller animals including rabbits, guinea pigs and hamsters. Ten dogs, two cats and a rat named Bernard were rescued. The staff and SPCA seek donations to rebuild the shelter (www.humanedurham.com.).

• The landmark Franklin Hotel in Assiniboia, Saskatchewan, has been destroyed by fire. The blaze in the almost century-old, three-story wooden building spread to a nearby auto parts store, destroying it as well. There were no injuries.

• AbitibiBowater has warned of legal action after Newfoundland and Labrador Premier Danny Williams said his government will take over the forestry company's hydroelectricity assets and resource rights. Williams said a deal struck in 1905 was broken when the company decided to close its money-losing mill in central Newfoundland and sell the rights itself.

Jim Fox can be reached at canadareport@hotmail.com

Economic stimulus will increase debt 12/20/08 [Last modified: Thursday, November 4, 2010 1:11pm]
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