CANADIAN IMMIGRATION NEWS

Canadian Economy `Remarkably StableŒ, Statistics Agency Says

Monday, 16 April 2007

Canadian Economy `Remarkably StableŒ, Statistics Agency Says

Canadian Economy `Remarkably StableŒ, Statistics Agency Says Canada avoided a major slowdown last year because the economy's better at adapting to slumps in foreign demand or to rapid gains in commodity prices, said a top economist at the federal statistics agency. Gross domestic product grew 2.7 percent last year, a period marked by sluggish auto exports, a slower U.S. housing market and fears of a global slowdown, said Philip Cross, manager of Statistics Canada's current economic analysis division. The growth rate was close to 2005's 2.9 percent. "Many commentators continued to under-estimate the ability of Canadians to react and adapt to fast-changing or unexpected circumstances,''Cross wrote from Ottawa in an annual paper on the world's eighth-biggest economy. The paper analyses a year in which Cross's agency and the country's central bank were puzzled because the Canadian job market stayed tight even as factory exports struggled. The economy's resilience led Finance Minister Jim Flaherty to record a bigger-than-expected budget surplus last month, after promising to shrink the gap by cutting taxes. Canadians have helped protect the economy by seizing on new employment opportunities in the oil-rich western province of Alberta as other regions suffered losses, Cross wrote in the paper. About 57,100 Canadians moved to Alberta last year for higher-paying jobs in the energy sector. That was the largest migration from other regions to one province since 1972 when the agency started keeping such records, he wrote. Lower interest rates and import prices helped companies in central Canada, where the currency's 39 percent rise against its U.S. counterpart since 2002 has hurt manufacturers, build new facilities and hire service workers, Cross said. Non-U.S. Shipments Manufacturers also are shipping more to countries other than the U.S., to take advantage of better exchange rates. Such shipments rose 15 percent last year, capping a 45 percent rise in four years, Cross wrote. Last year wasn't the first time the economy grew in the face of risks. Since 2003, exports were slowed by outbreaks of mad-cow disease and SARS, as well as the fastest-ever rise in the Canadian dollar. Gross domestic product still expanded by an average 2.7 percent a year during that period. "The economy has been hit with a number of shocks which in the past could well have triggered a slowdown or even recession,'' Cross wrote. "Instead, growth has been remarkably stable since 2003.'' Still, Cross warned in an interview today that Canadians shouldn't let down their guard. While there are currently "no signs of the types of imbalances that would signal a recession,'' favorable conditions might disappear "the minute'' Canadians stop adapting as they are now, he said. Source: bloomberg.com