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Canada report

Bad news haunts Canada's economy

© St. Petersburg Times
published June 15, 2003

Canada's economy is being buffeted by bad news, from SARS and mad cow disease to weakness around the world, Bank of Canada Governor David Dodge says.

The number of "recent adverse developments" will reduce near-term economic growth in Canada, leading analysts to suggest the central bank won't boost interest rates anytime soon.

The return of severe acute respiratory syndrome to Toronto, where there have been 32 deaths since March, has hurt tourism all across the country, with a $180-million loss in business in Canada's largest city.

Dodge said the closing of export markets to Canadian beef because of an isolated case of mad cow disease is being felt economically, along with the weakness in the U.S. economy, Canada's largest trading partner.

Meanwhile, the World Health Organization is concerned about Toronto's tracking of people who have been exposed to SARS. That was after a North Carolina man who visited a relative at a Toronto hospital last month has come down with the illness.

The organization is considering reinstating its warning against travel to Toronto.

Offer of loans doesn't please beef producers

Interest-free loans for the beef industry, devastated by the discovery of mad cow disease, aren't impressing farmers.

Federal Agriculture Minister Lyle Vanclief said loan guarantees would be part of a disaster assistance plan that would be conditional on the provinces joining in.

Beef producers said going further in debt with loans isn't the answer.

"Loans have to be repaid and you cannot borrow yourself out of trouble," said Walter Schmidt, owner of a feedlot near Barrhead, Alberta.

The Alberta government is giving $1-million to help people laid off as the U.S. border remains closed to Canadian beef.

In brief

A Canadian government committee voted to accept same-sex marriages and stop the legal battles against gays and lesbians. Justice Minister Martin Cauchon said he is considering whether to legalize same-sex marriages or continue opposing them in the Supreme Court. An Ontario court ruling in the past week allows gays to marry.

The Mounties received information in 1984 that a bomb would be placed on an Air India flight in Montreal, it was learned at a court hearing in Vancouver. That was a year before a bomb ripped apart an Air India flight from Toronto over the Atlantic Ocean, killing 329 people. Ripudaman Singh Malik and Ajaib Singh Bagri, both of British Columbia, are on trial for first-degree murder and conspiracy.

Sweeping corporate-fraud legislation is being prepared by the Canadian government to reassure investors after numerous international corporate scandals. The government also promises tougher penalties for companies found negligent in the injury or death of an employee, a long-awaited response to the 1992 Westray mine disaster in Nova Scotia where 26 miners died. The antifraud legislation would toughen rules on insider trading, making it a federal crime punishable by up to 10 years in prison.

Facts and figures

Canada's high-flying dollar continues to gain strength, rising to 74.79 U.S. cents. The U.S. dollar is $1.3370 Canadian, before bank exchange fees.

The key Bank of Canada interest rate remains at 3.25 percent while the prime lending rate is 5 percent.

Canadian stock exchanges were higher Friday, with the Toronto index at 7,024 points and the Canadian Venture Exchange, 1,107 points.

Lotto 6-49: (Wednesday) 3, 9, 24, 37, 46 and 49; bonus 14. (June 7) 17, 20, 23, 30, 40 and 47; bonus 11.

Regional briefs

Businesses in Quebec will get less government assistance, the new Liberal government says. Finance Minister Yves Seguin said he will eliminate subsidies and tax breaks for businesses to save $800-million a year. Even with the cuts, Quebec will continue to be the "most generous" province in Canada in terms of funding the business community, he said.

New Brunswick Premier Bernard Lord narrowly won re-election with a majority of only one in the provincial Legislature. The June 20 installation of the government might have to be postponed until recounts are completed. Lord's Conservatives won in 28 districts while the Liberals elected 26 and the New Democrats one.

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