Wednesday April 08, 2015

Bank of Canada survey: Cheap oil hurts the whole economy

Bank of Canada governor Stephen Poloz told reporters in Istanbul that Canada didn't cut rates to boost exports, but to help out an economy hit by lower oil prices.

Bank of Canada governor Stephen Poloz told reporters in Istanbul that Canada didn't cut rates to boost exports, but to help out an economy hit by lower oil prices. ( Adrian Wyld/Canadian Press)

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Well, as far back as January, the governor of the Bank of Canada, Stephen Poloz, was bracing for the impact of plunging oil prices on the economic health of the country. Now, his voice is being joined by a chorus of top Canadian business leaders. 

Executives from more than 100 companies, from all sectors of the economy, were surveyed by the Bank of Canada. And they all seem to say the same thing: falling oil prices are pulling everyone down -- slowing hiring, and slowing investment. Today we're asking just how bad is it, and whether "diversification" is really the cure. 

Craig Alexander is the Senior Vice President and Chief Economist for the TD Bank Financial Group.

''Obviously what we really want in the long run is to be a knowledge based economy that isn't dependent on prospects and the vagarities of what happens to commodity prices." - Craig Alexander, Chief Economist for the TD Bank Financial Group

Just last week, a survey of CEOs by the Globe and Mail and the Business News Network found 62 per cent of them agreeing on one way forward. They say it's time to better diversify the economy, and reduce Canada's dependence on the energy sector. 

Armine Yalnizyan is a Senior Economist with the Canadian Centre for Policy AlternativesStephen Gordon is an economics professor at Laval University in Quebec City.

This segment was produced by The Current's Gord Westmacott and Marc Apollonio.