Recession over, says International Monetary Fund

OTTAWA — The International Monetary Fund is declaring the worst global recession since the Second World War over, but warns that the recovery will be sluggish and hard choices — including higher taxes — will be necessary to sustain the economic rebound.

OTTAWA — The International Monetary Fund is declaring the worst global recession since the Second World War over, but warns that the recovery will be sluggish and hard choices — including higher taxes — will be necessary to sustain the economic rebound.

In an article to be published Wednesday, the international financing agency’s chief economist says the recession has drained government treasuries to such an extent that “in nearly all countries . . . higher taxation is inevitable.”

“The crisis has left deep scars,” writes Olivier Blanchard, citing corporate bankruptcies, financial systems that have become partly dysfunctional, and the need for households in the United States to start saving again.

“All this means that we may not go back to the old growth path, that potential output may be lower than it was before the crisis.”

The assessment echoes the Bank of Canada’s latest outlook in July, when governor Mark Carney all but declared the recession in Canada over while also warning that the economy will emerge smaller and with a reduced output potential.

Canada has had three quarters of economic shrinkage — two successive quarterly declines is a technical definition of recession — so expected growth in the current summer quarter means the recession is over. However, employment growth is expected to lag and further job cuts are expected for several more months.

The IMF’s view that governments will have to raise taxes flies in the face of the public assurances of Prime Minister Stephen Harper and Finance Minister Jim Flaherty.

Both have insisted economic growth alone will be sufficient to eliminate the deficit over the next few years

Toronto economic consultant Dale Orr agrees that Ottawa can avoid raising taxes, but he says Canadians should be aware of what this means.

Orr and several other private sector economists have called Ottawa’s deficit projections out of date.

Just Posted

Parenting: Every woman will have a different pregnancy experience

Wife whose hormones are unbalanced can be unpleasant experience

Men posing as repo men attempt to steal vehicle in Red Deer County

Two men attempted to steal a utility vehicle from a Red Deer… Continue reading

Red Deerian spreads kindness with one card at a time

One Red Deerian wants to combat bullying by spreading kindness in the… Continue reading

Bowden baby in need of surgery

“Help for Alexis” Go Fund Me account

PHOTO: First Rider bus safety in Red Deer

Central Alberta students learned bus safety in the Notre Dame High School… Continue reading

WATCH: Annual Family Picnic at Central Spray and Play

Blue Grass Sod Farms Ltd. held the Annual Family Picnic at the… Continue reading

Woman has finger ripped off at West Edmonton Mall waterslide

SASKATOON — A Saskatchewan woman says she lost a finger after her… Continue reading

Uncertainty looms over Canada’s cannabis tourism, but ambitions are high

TORONTO — Longtime marijuana advocate Neev Tapiero is ready for the cannabis-driven… Continue reading

Feds mulling safeguards to prevent ‘surge’ of cheap steel imports into Canada

OTTAWA — The federal government extended an olive branch of sorts to… Continue reading

Ontario govt caps off summer session by passing bill to cut Toronto council size

TORONTO — The Ontario government passed a controversial bill to slash the… Continue reading

Updated:Italian bridge collapse sends cars plunging, killing 26

MILAN — A 51-year-old highway bridge in the Italian port city of… Continue reading

Saudi Arabia spat affecting Canadians embarking on hajj, community members say

TORONTO — Members of Canada’s Muslim community say recent tensions between Ottawa… Continue reading

Tug carrying up to 22,000 litres of fuel capsizes in Fraser River off Vancouver

VANCOUVER — The smell of diesel filled the air as crews worked… Continue reading

Nebraska executes first inmate using fentanyl

LINCOLN, Neb. — Nebraska carried out its first execution in more than… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month