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Letter to the editor

Banker: Canada will get financial bumps, but survive

By JIM FOX, Times Correspondent
Published January 27, 2008

Canadians will financially "live through 2008 fine" and likely avoid a recession, says Bank of Canada Governor David Dodge.

There will be some bumps in the road, however, "but we'll get through fine," Dodge said in his outgoing message before retiring.

A global slowdown and U.S. financial woes that have cut exports from Canada will cause the economy to slow until the second half of the year, he predicted.

To boost the economy, the central bank dropped its trendsetting interest rate by one-quarter of a percent to 4 percent and plans a further reduction on March 4.

With inflation under control, the bank can ease its monetary policy to lower borrowing costs while intervening if the dollar rises again too quickly.

The dollar's jump to parity with the U.S. currency "raised consumers' awareness of the considerable differences between Canadian and U.S. prices," Dodge said.

This resulted in "greater-than-projected downward adjustment of the prices of some goods, particularly automobiles."

Canada's gross domestic product is forecast to grow by 1.8 percent this year, down from a robust prediction of 2.3 percent earlier, and to 2.8 percent next year.

Snow snarls traffic

After a mid-January thaw with temperatures in the 50s Fahrenheit in southern Ontario, winter roared back with a vengeance with snow and cold.

One person was killed and dozens injured while thousands of cars and trucks were destroyed and damaged in numerous multiple-vehicle crashes in blinding snow across Ontario since last weekend.

The westbound lanes of Highway 401, Ontario's major east-west freeway, were reopened on Friday a day after a five-truck pileup that killed one person near Morrisburg.

The highway was also closed for hours in both directions near Woodstock and both ways on Highway 400 north of Toronto for most of the day last Sunday.

In the east, wind and blowing snow closed schools, Memorial University, colleges and businesses in St. John's, Newfoundland, on Friday.

News in brief

-Canada was urged to refocus its role in Afghanistan away from combat to training Afghan national security force, diplomacy and reconstruction. The Independent Panel on Canada's Future Role in Afghanistan recommended the mission be extended beyond February 2009 only if there is additional allied support and the acquisition of new helicopters and aerial vehicles. Another Canadian soldier, Etienne Gonthier, 21, of St-Georges, Quebec, died after his vehicle hit an explosive device.

-The Quebec government is being accused of shelving a report suggesting French-speakers will be a minority in Montreal by 2021. University of Montreal researcher Marc Termote said the government hasn't published his report because of its politically charged conclusions. Quebec nationalists say the government has ignored their calls to beef up French-first language laws.

Facts and figures

The dollar has resumed its climb back toward parity with the U.S. greenback. It was 99.51 cents U.S. Friday while the U.S. dollar returned $1.0050 Canadian, before bank exchanges fees.

Canada's inflation rate dropped last month to 2.4 percent from 2.5 percent while the core index at 1.5 percent is the lowest in two years.

The Bank of Canada's key interest rate is down to 4 percent while the prime lending rate fell to 5.75 percent.

Canadian stock markets are lower, with the Toronto Exchange index at 12,935 points and the TSX Venture Exchange 2,571 points.

Lotto 6-49: Wednesday 6, 10, 13, 20, 32, 37; bonus 34. (Jan. 19) 13, 18, 22, 29, 37, 49; bonus 47. Super 7: (Jan. 18) 12, 19, 22, 35, 36, 40, 41; bonus 39.

Regional briefs

-Canada's first enhanced driver's licenses are available in British Columbia for use crossing the U.S. border. The licenses, a voluntary option for drivers, are proposed as an alternative to the passports that will be required to enter the United States at land crossings and sea points starting in June 2009.

-Thousands of residents and businesses in Jasper, Alberta, were without heat Wednesday after a construction crew punctured the town's main natural gas line. After repairs were made, crews went door-to-door reigniting pilot lights on furnaces and appliances.

-New Glasgow and Stellarton, Nova Scotia, will host the federal Green Party's national convention next September for about 400 members. That's where leader Elizabeth May will seek election in the next federal vote.

-Gamblers had the edge getting unexpected odds at a misloaded change machine at Casino Regina. Over two days, the machine dispensed $20 bills instead of fives, resulting in a loss of $27,500, including $11,000 to one gambler. The casino has recovered half the money and banned people identified as using the machine for not reporting the problem.

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

[Last modified January 27, 2008, 02:33:47]