Today, Bank of Canada Governor Mark Carney spoke in Windsor on the state of Canada’s economy and made his predictions for the future. The outlook seems that the economy will remain at a crawl, for the time being, with gradual growth.
Still recovering from the recession, growth will not come easily in Canada, due to the fact that our economy is tied heavily to other nations, especially the United States. The U.S. is also trying to recover from the past recession, and the results have hurt the more stable Canadian economy. This is due in large part to the decline in exports making their way to the U.S. because Americans are reluctant to pay for unnecessary items in fear of a, “double-dip,” recession. Therefore sales are on a downward trend.? Carney had this to say on the foreign markets, “During this period of adjustments, we should expect subdued growth in major advanced economies.”
Back in Canada, the GDP, has fallen for the first time in over a year this past July by 0.1%. It does not seem like a huge fall but the worrisome part is the lack of growth of the economy. In an age where job opportunities are shrinking, as small and large businesses downsize or fold up completely, there is a cause for concern. Carney also hopes that the “average amount of hours worked [by Canadians] will return to its trend, but only very gradually.” However, “the unusual uncertainty surrounding the outlook, warrants caution.”
With unemployment starting to become an issue for more Canadians, those with jobs will soon be facing a hike in their employment insurance (EI) premiums. However, the federal government is recognizing that Canadians are not bursting at the seems with cash these days. In light of this, Financial Minister Jim Flaherty has announced the recent increase will be slightly scaled back. No longer will Canadians be expected to pay 15 cents extra on every $100 instead the hike will be reduced to 5 cents. Canadians across the nation are pinching pennies as it is and money seems to always be tight. Although this is a small increase, over time, will EI premiums, ironically, be a factor that sends Canadians to the unemployment line?