Economy a worry for many Canadians
A growing number of Canadians are more worried about the economy and how they'll fare in the midst of what many consider a mild recession, according to a survey released Thursday by the Economic Club of Canada.
Many of the respondents were concerned about how the weaker economy will impact their personal finances. About 47 per cent said they believe income will fall below the cost of living.
The poll, conducted in December, found that only 25 per cent of respondents said they felt optimistic about the economic prospects in the coming year.
That's down from a year earlier when 36 per cent of respondents said they were optimistic, and down even further from the 54 per cent who said they were optimistic in the 2009 survey.
"This is the most pessimism we've seen, except for briefly in 2008, since 1996," said Michael Marzolini, chairman of Pollara Strategic Insights, which conducted the survey on behalf of the Economic Club, in a release.
"Canadians not only believe we're now in a recession, but expectations for the length of the recession are actually longer than they were in any year since 2008."
Two years ago, the Canadian economy was in the midst of rapid economic recovery from the deep recession that began in late 2008 and carried through to the summer of 2009.
Canada's economic growth began to moderate in the second quarter of 2010 and slowed even further in the second half of 2011, amid prolonged warnings about the potential consequences of the European government debt crisis.
Most economists predict Canadian growth this year will be less than two per cent. Such feeble growth won't do much to create jobs for the 1.5 million Canadians currently unemployed or lower the 7.4 per cent national jobless rate.
Statistics Canada releases the December unemployment report on Friday.
Prime Minister Stephen Harper, speaking Thursday on a call-in radio show that's broadcast throughout Alberta, said he's "seriously concerned" when he looks at Canada's principle trading partner, the United States, as well as Europe.
"I see fairly dim prospects for robust growth going forward," Harper said on The Rutherford Show.
The economy is the government's No. 1 priority. It will move forward on reducing the deficit, with the aim of eliminating it, while ensuring its programs are sustainable over the long-term, the prime minister said.
"I think that is the responsibility of the government and we will be moving forward this spring with some fairly aggressive action on a wide range of areas," Harper said.
Strong dollar weighs on job creation
The strength of the Canadian dollar — which makes exports and domestic operations less competitive — won't help the job market, suggested CIBC economist Avery Shenfeld.
"Whether it's a few cents weaker than parity or a few cents stronger than parity, it still positions Canadian manufacturing labour as very expensive relative to some of the alternatives, even in the U.S.," he said after a panel discussion with the Canadian bank economists at the Economic Club.
About 70 per cent of the poll's respondents said they believe the country is already in a mild recession, though not yet in a technical recession.
A technical recession is two successive quarters of economic shrinkage.
In the third quarter, real gross domestic product grew at an annualized rate of 3.5 per cent after a second-quarter drop of 0.5. per cent. That was mostly driven by the energy industry, based in Western Canada.
Poll results were collected online from 2,878 Canadians by Pollara research firm and had a margin of error of 1.8 per cent.