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Fragile economy eats at surplus


© St. Petersburg Times, published August 11, 2002

Times are getting tougher for Canadians as the economic picture is far from bright, Finance Minister John Manley warns.

Times are getting tougher for Canadians as the economic picture is far from bright, Finance Minister John Manley warns.

This year's budget surplus is being eaten away by turmoil in the financial markets and the global economy, meaning that prudence will be necessary, said Manley, who also is deputy prime minister.

"We are determined not to fall into deficit, but the expectations of everybody that we will spend a lot of money (on new social programs) are not based on the facts," he said.

The bank balance showed $755-million after April and May combined, which compares with a $6.8-billion surplus during the same period last year. In May, the government ran a deficit of $116-million compared with a surplus of $3.2-billion the same month a year earlier.

The outlook for the rest of the year is not ideal, despite projections the surplus for the 2002-03 fiscal year could come in at more than $6-billion.

Canada's economy continues to hold its own and is expected to grow at 3.5 percent this year. The big concern is what will happen in the United States, Canada's largest trading partner, where financial market ills are hurting consumer confidence that could curtail demand for Canadian goods.

Conservative leader Clark says he intends to resign

Federal Conservative leader Joe Clark has announced his intention to resign, possibly opening the way for former Ontario Premier Mike Harris to take his place.

A former aide to Harris said he hasn't ruled out returning to politics on a federal level and is heartened by Canadian Alliance leader Stephen Harper's recent efforts to unite the political right.

Harris, an outspoken critic of the federal Liberal government, has called for a strong alternative that he feels would be difficult unless the Canadian Alliance and the Conservatives can join forces.

Names in the news

-- Marie Deschamps, a Quebec Court of Appeal judge, was named to the Supreme Court of Canada by Prime Minister Jean Chretien. Deschamps, 49, will replace Claire L'Heureux-Dube, who retired July 1. The new judge is known as a tough but fair jurist who specializes in complex commercial litigation. Her husband, Paul Gobeil, was a Quebec cabinet minister in Robert Bourassa's Liberal government from 1985 to 1989.

-- Former finance minister Yves Duhaime is suing a Liberal member of the Quebec Legislature for $250,000 for defamation, saying influence-peddling accusations have damaged his reputation. The case involves Tom Mulcair, who accused Premier Bernard Landry of trying to enrich friends like Duhaime.

-- Top Canadian rockers, including Sarah McLachlan, will take part in a charity concert in Vancouver on Oct. 10 to raise money to build the British Columbia Cancer Research Center. Also taking part will be Bryan Adams, Chantal Kreviazuk, Jann Arden and the Barenaked Ladies.

Facts and figures

Bargain hunters helped push up Canadian stock markets over the past week.

The Toronto Exchange index advanced to 6,612 points while the Canadian Venture Index was 1,028 points.

Canada's dollar is higher at 63.31 U.S. cents while the U.S. dollar is worth $1.5795 Canadian before bank exchange fees.

There's no change in the key Bank of Canada interest rate of 2.75 percent or the prime-lending rate at 4.5 percent.

Lotto 6-49: (Wednesday) 2, 16, 21, 22, 28 and 47; bonus 18. (Aug. 3) 4, 14, 24, 27, 30 and 40; bonus 38.

Regional brief

-- Investigators think an arsonist might have been responsible for a fire last weekend at Woodbine Racetrack in Toronto that killed 31 thoroughbred racehorses. Damage to the barn, which didn't have a sprinkler system, was $3-million.

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