Economy slides, but no plan for major stimulus package

The Canadian government isn't planning any major stimulus package in an upcoming economic statement even though the Bank of Canada now suggests a recession could be looming.

It's the first time central bank governor Mark Carney has conceded the "possibility" of a recession as he called for more stimulus and lower interest rates.

Economic conditions have deteriorated more quickly than anticipated even a month ago, Carney said, hinting the bank will cut interest rates on Dec. 9.

Finance Minister Jim Flaherty doesn't foresee any special measures coming as taxes have already been cut to boost the economy.

Prime Minister Stephen Harper, whose Conservatives were re-elected last month, said Canada might have to run a deficit after several years of surpluses to weather the economic downturn.

Canadian stock markets lost nearly 20 percent of their value last month, while lower oil and commodity prices weakened Western Canada's resource-based economies and Ontario and Quebec manufacturers have cut tens of thousands of jobs and closed plants and mills.

Big 3 bailout issues

Canada won't be able to offer assistance to the Big 3 automakers operating in this country without a "bailout" plan enacted in the United States, Industry Minister Tony Clement said.

The Detroit-based automakers have asked for $4-billion (U.S.) from the Canadian government and another $25-billion from the United States to head off bankruptcy.

Clement and Ontario Economic Development Minister Michael Bryant met with automakers in Detroit and then went to Washington for information on rescue plans.

The companies and unions must first devise a plan "for the industry's long-term success," Clement said.

There's the possibility Canada and Ontario could act even if the United States doesn't, but it won't be a "no-strings-attached bailout," Bryant said.

News in brief

• Canada's new Fisheries Minister Gail Shea said the controversial seal hunt will continue next year. This is despite a plan by the European Union to ban the import of seal products from countries that "practise cruel hunting methods." Canada will be "proceeding as usual" and there are no plans to implement new hunting regulations, she said.

• Some Ontario ski resorts were open this weekend after ample amounts of snow off Georgian Bay put them back in business. In Nova Scotia, Transport Minister Murray Scott apologized to hundreds of motorists stranded overnight on the Trans-Canada Highway after an intense surprise snowstorm. Across the province and into Prince Edward Island, there were power outages caused by the blizzard.

Facts and figures

Canada's dollar has taken another nosedive in reaction to lower oil prices and economic conditions.

It slipped to 77.61 cents U.S. on Friday while the U.S. greenback returned $1.2886 Canadian.

The Bank of Canada's key interest rate is unchanged at 2.25 percent while the prime lending rate is 4 percent.

Stock markets took a beating, with the Toronto exchange index losing 766 points on Thursday and settling at 7,719 points Friday. The TSX Venture exchange index was down to 690 points.

Canada's inflation rate dropped last month to 2.6 percent, down from 3.4 percent in September, for the largest decrease since June 1959.

Lotto 6-49: (Wednesday) 24, 28, 34, 38, 44 and 45; bonus 35. (Nov. 15) 8, 9, 12, 16, 19 and 21; bonus 47. Super 7: (Nov. 14) 6, 10, 18, 28, 33, 35 and 43; bonus 17 .

Regional briefs

• An income tax cut is being planned by British Columbia to stimulate the economy. Premier Gordon Campbell said the global economic crisis requires an immediate response. His government's 10-point plan includes accelerated cuts in personal income taxes and small business taxes.

• Police say the deaths of four family members and their dog in a suburban Toronto home were a murder-suicide. The victims were Keith Delong, a retired IBM worker in his 60s, his wife, Wanda, and their adult children, Richard and Elizabeth. They were found in the Delongs' house on Welwyn Avenue in Scarborough. No further details were given.

• Media reports say several hundred jobs are being cut by Bell Aliant in Atlantic Canada, Ontario and Quebec. The layoffs at the telecommunications company were said to include more than 100 nonunionized managers as a reorganization is under way.

• Astronomers said a meteor crashing to earth caused a celestial show described as a huge flaming ball between Alberta and Saskatchewan. A huge flash of light briefly turned the dark sky into daylight. There were also reports of a loud boom around Lloydminster and North Battleford, Saskatchewan.

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

Economy slides, but no plan for major stimulus package 11/22/08 [Last modified: Thursday, November 4, 2010 10:08am]

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