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'Unusually challenging' times in stalled recovery

Canada's economic recovery has stalled even as the federal government says things are on track and the chief banker calls these "unusually challenging" times.

It's a bumpy road ahead after Canada's economy shrank in July for the first time in almost a year and economists warn growth this year will fall far short of the best projections.

The recovery remains "on track," Finance Minister Jim Flaherty said, even though there will be some "ups and downs," such as in July when the gross domestic product fell 0.1 percent. There was also an 8 percent drop in real estate sales.

The introduction of expanded taxes on many additional goods and services by combining the federal and provincial sales taxes in Ontario, British Columbia and Nova Scotia on July 1 took much of the blame.

Bank of Canada Governor Mark Carney, who recently raised the key interest rate three times to 1 percent, said the recovery will be modest and uneven.

"The global recovery is entering a new phase — the easy bit is now over," he said.

Johnston installed as 28th governor general

Former academic and law professor David Johnston became the 28th governor general, the official representative of Queen Elizabeth II in Canada, on Friday.

Appointed by Prime Minister Stephen Harper, Johnston said he accepts the position "with joy . . . and with gratitude."

In the nonpolitical role that includes being commander-in-chief of Canada's military, he paid tribute to soldiers as well as outgoing Governor General Michaelle Jean, who becomes a special UN envoy to her homeland, Haiti.

"I believe it is essential to support families and children, to reinforce learning and innovation and to encourage philanthropy and volunteerism," he said, explaining his goals.

Johnston, 69, who headed the University of Waterloo in Ontario and McGill University in Montreal, said Canada is "a smart and caring nation" where Canadians can "grow their talents to the maximum."

News in brief

• Environment Minister Jim Prentice has appointed a panel to review concerns over the quality of environmental monitoring in Alberta's oilsands. The announcement came after Canadian filmmaker James Cameron toured the controversial site and met with scientists and Premier Ed Stelmach. Cameron called the oilsands, with deposits containing as much as 173 billion barrels of economically viable oil second in size to Saudi Arabia, "a gift" that must be better managed for their environmental impacts.

• The federal government is reviewing an Ontario court ruling that could give the green light to "red-light" districts. Superior Court Judge Susan Himel ruled that a key anti-prostitution law is unconstitutional because it prevents sex workers from moving indoors (such as in a brothel) to protect themselves. "The government is very concerned about the decision and is seriously considering an appeal," Justice Minister Rob Nicholson said.

Facts and figures

After losing some momentum, the Canadian dollar rebounded to 97.90 cents on Friday while the U.S. greenback returned $1.0215 Canadian, before bank exchange fees.

The Bank of Canada's key interest rate is steady at 1 percent while the prime lending rate is 3 percent.

Stock markets advanced, with the Toronto exchange index at 12,377 points and the TSX Venture Exchange at 1,732 points.

Lotto 6-49: (Wednesday) 1, 7, 19, 31, 35 and 44; bonus 36. (Sept. 25) 7, 11, 15, 30, 31 and 45; bonus 23. Lotto Max: (Sept. 24) 9, 22, 25, 30, 31, 39 and 42; bonus 19.

Regional briefs

• The editorial staff at Maclean's newsmagazine stands by its cover story on Quebec corruption, but Rogers Publishing president Brian Segal said the company "sincerely regrets" any offense it might have caused. Quebec Premier Jean Charest and other politicians have condemned the story that calls the province the "most corrupt" in Canada. It reported on a series of continuing scandals from as far back as the 1950s.

• Ontario police want to find the rightful owner of a winning $12.5 million Super 7 Lottery ticket stolen in 2003. It's the latest case involving a lottery store dealer taking someone's winning ticket. Police said the ticket was checked at the Variety Plus store in Burlington before the Ontario Lottery and Gaming Corp. introduced safeguards to prevent such thefts. Kenneth Chung, 28, Jun-Chul Chung, 60, and Kathleen Chung, 29, are charged with fraud and money laundering.

Jim Fox can be reached at canadareport@hotmail.com

'Unusually challenging' times in stalled recovery 10/02/10 [Last modified: Saturday, October 2, 2010 5:31am]

    

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