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Economic forecasts get darker

The federal government will have to slash its economic forecasts significantly when it updates its fiscal plan in May, say economists who are in the midst of downgrading their own predictions.

The Bank of Nova Scotia has cut its estimate of economic growth in Canada to 2.1 percent from the 3.6 percent it was projecting in November. CIBC World Markets is warning that economic expansion could be slower in Canada than in the United States and that Canada will take a long time to recover. And while the Bank of Montreal is more upbeat than most about Canada, even it is about to tone down its forecast slightly for the year.

In October, Finance Minister Paul Martin based his five-year budget plan on a growth rate of 3.5 percent for 2001 and 3.1 percent for 2002-2006. Since then, the Bank of Canada has said it expects just under 3 percent for this year.

Martin has held off updating the books until he knows where private-sector economists are heading but will no doubt have some major changes to make to his plan set out last October, economists say.

With stock markets plummeting, fourth-quarter economic growth worse than expected, the job market and corporate earnings softening and new first-quarter economic indicators looking poor, "all of these things will lead to a spiral of downward projections," said Scotiabank's chief economist, Warren Jestin.

The government's expectations for growth are important because they determine how much Ottawa expects to collect in tax revenues, how much it expects to spend on Employment Insurance and social programs and how much surplus will be left over for debt payments.

Frozen toddler may not

lose any fingers or toes

TORONTO _ A feeding tube running from her nose, 13-month-old Erika Nordby babbled and played with a microphone Friday as her mother said the toddler may not lose any fingers or toes, despite being frozen and having her heart stop for two hours.

Leyla Nordby wept and thanked all who helped her daughter make what doctors call a miraculous recovery since she was found lying face down in the snow, clad only in a diaper, after wandering into the frigid night.

Dr. Nadeem Mian, Erika's pediatrician, said at the news conference in Edmonton, Alberta, that new tissue was growing on the child's left foot and that there was no infection, so she might avoid amputation.

Canada proposes Internet child pornography law

OTTAWA _ New laws being proposed to Parliament would update Canada's criminal code to include offenses committed on the Internet, such as viewing or distributing child pornography.

Under the broad justice bill, which Justice Minister Anne McLellan submitted Wednesday, viewing a Web site that contains child pornography could bring a five-year prison sentence, with up to 10 years for transmitting, exporting or making it available on the Internet.

It also would impose a maximum five-year prison sentence for attempting to lure children on the Internet and empower judges to order the deletion of Canadian Web sites that include child pornography.

Sex killer denied early release from prison

OTTAWA _ A woman involved in one of Canada's most notorious sex crimes was denied parole last week and will have to remain in prison for the duration of her 12-year sentence.

Karla Homolka, who pleaded guilty to the killings of two teenaged girls as part of a deal with prosecutors for testimony against her ex-husband, was eligible for early release in July.

But her lawyer has said she wanted to stay in custody until her sentence expires in 2005 so that she can leave the country immediately, due to death threats against her. If released early, Homolka would have to remain in Canada until her sentence ended.

While Homolka, 30, never requested early release, a review of her case by the National Parole Board was mandatory.

Homolka, who goes by the name Karla Teale in prison, received a 12-year sentence for her role in the 1992 sexual assault and killings of Kristen French, 15, and Leslie Mahaffy, 14. Her ex-husband, Paul Bernardo, is serving life for the same crimes.

Regional briefs

CHARITIES MAY SUFFER: The head of an Ottawa Islamic charity whose funding was once withdrawn because of security concerns warns that the federal government's new attempt to crack down on terrorist fundraising in Canada could harm legitimate organizations. "You could destroy the good work of the organization and the reputation of the people involved," said Kaleem Akhtar, executive director of Human Concern International. On Thursday, the federal government introduced a bill that could strip charities of their tax-free status.

FARMERS END PROTEST: About 35 farmers who spent a night at the Manitoba Legislature ended their protest in Winnipeg on Thursday afternoon after meeting with Premier Gary Doer and Agriculture Minister Rosann Wowchuk. The meeting, closed to the media, ended with the farmers cheering and clapping for Doer. The farmers are upset over what they they call inadequate support from the federal government.

WHEAT BOARD CHALLENGE: A group of Western Canadian grain farmers has lost its bid to get the Supreme Court of Canada to hear a constitutional challenge of the Canadian Wheat Board's monopoly in wheat and barley sales.

KLEIN EXPANDS CABINET: Alberta Premier Ralph Klein increased his Cabinet size by four Thursday and added an extra representative from Edmonton. Klein appointed newcomer Mark Norris as Economic Development minister.

AILING MAN IGNORED: Two ambulance attendants have been fired after failing to go to the aid of a man who died shortly afterward in a Montreal hospital. According to witnesses, the technicians refused to help a 31-year-old man in cardiac arrest because they said it was the end of their shift.

_ Information from the Toronto Globe and Mail and Associated Press was used in this report.

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