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Canada report: Canadians watching U.S. financial woes

Prime Minister Stephen Harper is assuring Canadians rattled by U.S. financial woes that all is still well in the north as he campaigns for re-election next month.

Anxiety is growing over how Canada will fare in the wake of what might become a financial tsunami from the south.

Bank of Canada governor Mark Carney warns the U.S. slowdown will be felt in Canada particularly by producers of lumber, building materials and automobiles, much of which are exported south.

Canada and other countries will have to help the United States' efforts to right its housing and lending industries, he said.

The central bank is injecting another $3.86-billion (in U.S. currency) of liquidity into the system — on top of a similar amount previously — to help the capacity of Canada's commercial banks to continue offering loans.

The gloomiest prediction comes from David Wolf, Merrill Lynch Canada economist, who believes there will be severe aftershocks in Canada's housing and mortgage markets.

With a deep U.S. recession a "foregone conclusion," Canada is likely headed for a milder one, said Scotia Capital's Derek Holt.

Conservatives leading

Liberal leader Stephane Dion, campaigning for the Oct. 14 election, accuses the Conservative government of economic mismanagement with no solutions from Harper.

Meanwhile, Harper said his party "believes in free enterprise, free trade and free markets" and will go after oil companies fixing prices.

The latest poll shows the Conservatives could be headed to forming a majority government while growing support for the socialist New Democrats could make them the next official opposition party in the Commons.

The Conservatives have a sizable lead with the support of 37 percent of respondents, followed by the Liberals at 24 percent, the NDP at 18 percent, the Green Party at 10 percent and the Bloc Quebecois at 9 percent.

News in brief

• Canada is amassing another budgetary surplus despite a slowing economy. The Finance Department said the surplus for the first four months of the fiscal year grew to $2.8-billion (in U.S. currency), above the $2.22-billion projected for the entire year ending March 31. Higher commodity prices, particularly for oil, brought wealth into the country, spurring job growth and pumping up corporate profits.

• Canadian women are having more babies but are waiting longer to do so. Statistics Canada says the country's fertility rate hit a 10-year high in 2006 with the average child per woman at 1.59, up from 1.54 a year earlier. There were 354,617 births two years ago, an increase of 3.6 percent, while the average mom's age has jumped to 29 years from 27 over the past 20 years.

Facts and figures

U.S. financial troubles rocked Canadian stock markets on Friday, with the Toronto composite index down 425 points to 12,121. The TSX Venture index was lower at 1,511 points.

The Toronto market was also affected by BlackBerry maker Research In Motion, based in Waterloo, Ontario, with shares losing a quarter of their value after a disappointing earnings report.

Canada's dollar advanced during the week to 96.69 cents U.S. while the U.S. dollar returned $1.0342 Canadian, before bank exchanges fees.

The Bank of Canada's key interest rate is steady at 3 percent while the prime lending rate is 4.75 percent.

Lotto 6-49: (Wednesday) 10, 27, 36, 40, 42 and 43; bonus 37. (Sept. 20) 2, 10, 24, 31, 33 and 49; bonus 3. Super 7: (Sept. 19) 8, 10, 12, 14, 25, 30 and 39; bonus 7.

Regional briefs

• Jeffrey Arenburg, whose mental health problems kept him from jail and a criminal conviction in Canada for shooting and killing Ottawa sports broadcaster Brian Smith in 1995, is being locked up for two years in the United States. Arenburg, 51, was found mentally competent to stand trial for punching a U.S. border officer at the Peace Bridge in Buffalo, N.Y. Smith was a former National Hockey League player and popular broadcaster in Ottawa, the nation's capital.

• What scientists believe are the Earth's oldest rocks have been found along the eastern bank of Hudson Bay in northern Quebec. They are in a section of bedrock in an Inuit village and may be as old as 4.28-billion years. This sheds more light on the continent's mysterious beginnings and may provide the first traces of life on Earth, researchers said.

• It's another wet, windy weekend for Canada's Maritime provinces from weather systems including Tropical Storm Kyle.

Jim Fox can be reached at canadareport@hotmail.com.

Canada report: Canadians watching U.S. financial woes 09/27/08 [Last modified: Wednesday, November 3, 2010 1:30pm]
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