'Sense of urgency,' as premiers meet with central banker
Last Updated: Friday, July 18, 2008 | 7:35 AM ET
CBC News
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With the Canadian economy said to be healing from a bruising first quarter but still threatened by inflation and torrid oil prices, the country's premiers met Friday for breakfast with the man who made that assessment, Bank of Canada governor Mark Carney.
The premiers were spending their last day of meetings in Quebec City talking about the economy. But they brought different agendas, as competing economic interests compelled them to seek different things from the country's top banker.
Provinces like Ontario and New Brunswick, provinces where manufacturing and exports have suffered, have different priorities than oil-laden Alberta, which has a vigorous economy.
On Thursday, Carney said the Canadian economy "remains robust" despite a 0.3 per cent contraction, on a year-over-year basis, in the first quarter. He forecast the economy would rebound to 0.8 per cent annualized growth in the second quarter and would attain 3.3 per cent full-year expansion, a figure more typical of the country's run of strong growth that ended last year, by 2010.Still, Carney predicted, higher energy prices will push inflation to a worrisome 4.3 per cent — beyond the central bank's target range of one per cent to three per cent — in the early part of next year before settling down to a more modest two per cent in the second half of 2009.
McGuinty worried
That has Ontario Premier Dalton McGuinty worried about his province's economic fortunes, since inflation tends to put upward pressure on interest rates and the Canadian dollar, and rising rates and a soaring loonie typically undermine the manufacturing and export sectors.
"We've been seized with a sense of real urgency when it comes to the economy," McGuinty said.
McGuinty said he would use the meeting with Carney to make sure the central banker is aware of the troubles his province's economy is facing, particularly with the strong dollar, but he stopped short of revealing whether he would call for interest rate relief.
Ontario has lost tens of thousands of manufacturing jobs in the last few years as manufacturers shift operations overseas. Some of the province's flagship employers, like General Motors, are closing factories and trimming production at others.
Graham 'listening carefully'
New Brunswick Premier Shawn Graham said the economic fortunes of his province, where the forestry industry is struggling, had him interested in Carney's outlook.
"As a small province with a large export-driven economy — in fact we're the largest export-dependent economy in the country — we want to make sure that we remain competitive," Graham said.
The premiers were also expected to talk about climate change and other environmental issues on the last day of their meeting.
With files from the Canadian PressShare Tools
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