Gloomy outlook for Canada

OTTAWA — Canadian governments can afford and should do more to stimulate the faltering economy that is expected to shrink a massive three per cent this year, says the OECD.

OTTAWA — Canadian governments can afford and should do more to stimulate the faltering economy that is expected to shrink a massive three per cent this year, says the OECD.

In a gloomy outlook for Canada and even worse one for most other industrial countries, the Organization for Economic Co-operation and Development says Canada and Germany in particular should spend more on trying to arrest the economic slide.

And it urges the Bank of Canada to cut interest rates to the bone and then consider increasing the money supply through so-called quantitative easing, something the central bank has already signalled it is reviewing.

The report comes as Statistics Canada issued the January gross domestic product numbers confirming the economy continues to plunge, down 0.7 per cent in January, a contraction that likely will result in seven or eight per cent GDP loss in the first quarter.

The OECD credits the federal government’s $40-billion stimulus over two years, but adds: “Nevertheless, the strong position that has been established by sustained fiscal surpluses provides scope for further action.

“Likewise, the remaining limited scope for further cuts in policy interest rates should be used and quantitative easing measures considered” by the Bank of Canada.

The international think tank representing 30 of the world’s richest countries says Ottawa should look to increasing income support for laid-off workers, a key opposition party criticism of Stephen Harper’s January budget.

The budget extends unemployment benefits five weeks but does not hike payments or loosen entry requirements, as opposition parties want.

“We’re quite concerned that we’re not really spending to get us out of this mess,” said NDP finance critic Thomas Mulcair, adding that much of the federal stimulus is contingent on the provinces and municipalities having the money to ante up, which he called a dubious assumption.

But the Conservatives protest the criticism is unfair because the stimulus has not been given time to work since the new fiscal year begins Wednesday.

“This stimulus isn’t even out the door yet… and the finance minister is on the record saying if we need to do more, we will do more. But let’s get this money out the door,” responded Ted Menzies, the parliamentary secretary to Finance Minister Jim Flaherty, who was flying to London for the meeting of G20 countries.

Just Posted

Readers’ Choice Awards 2021
Best of Red Deer 2021: Winners list

Here’s the Best of Red Deer Readers’ Choice Awards 2021 winners list:… Continue reading

FILE - Albertans enter a COVID-19 mass immunization clinic in downtown Calgary, on May 17, 2021. THE CANADIAN PRESS/Jeff McIntosh
Red Deer down to 115 active COVID-19 cases

Province identifies 165 new cases Sunday

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

A woman wears a hijab as she attends a demonstration against Bill 21 in Montreal, Sunday, October 6, 2019. The controversial Quebec secularism law bans some public-sector employees from wearing religious symbols in the workplace. THE CANADIAN PRESS/Graham Hughes
Somali-Canadian group says another woman wearing a hijab attacked in Edmonton

EDMONTON — The chair of a group representing Somali Canadians in Edmonton… Continue reading

Canada head coach Bev Priestman reacts during the women’s international friendly soccer match between England and Canada at Bet365 stadium in Stoke on Trent, England on April 13, 2021. THE CANADIAN PRESS/AP, Rui Vieira
Canada coach Bev Priestman hopes to see improved performance against Brazil

Priestman will likely field a more senior lineup to start Monday

Jimmy Smits arrives at a special screening of “In the Heights” during the Los Angeles Latino International Film Festival at the TCL Chinese Theatre on Friday, June 4, 2021. (Photo by Richard Shotwell/Invision/AP)
Jimmy Smits figured he could carry a tune ‘In the Heights’

‘In the Heights’ follows dreams and struggles of Latino community in New York

Actress Devery Jacobs poses for photographs on the red carpet during the Toronto International Film Festival in Toronto on Thursday, September 13, 2018. Jacobs grew up in the Kanien’kehá:ka Mohawk Territory in Quebec but says shooting her new TV series “Reservation Dogs” in the U.S. felt like “a sense of home. ” THE CANADIAN PRESS/Nathan Denette
Toronto-based Devery Jacobs on starring in Indigenous-led series ‘Reservation Dogs’

Series to make its world premiere at Tribeca Film Festival

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

A man wears a face mask as he walks by a sign for a COVID-19 vaccination site in Montreal, Sunday, May 16, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Canada paid a premium to get doses from Pfizer earlier than planned

OTTAWA — Canada paid a premium to get more than 250,000 doses… Continue reading

Most Read