Budget 2009- Canadians react

The Globe and Mail took an interesting approach towards their coverage of the Federal Budget that was released earlier this week.

A laid-off retail manager, a self-employed consultant, a young mother and a small businessman reflect on the recession as Finance Minister Jim Flaherty delivers the buuget. Check out the video and hear what some Canadians think about Budget 2009.

You can also read an interesting article revealing that a new Globe and Mail-CTV poll shows that many believe Prime Minister Harper would never have unveiled this week's stimulus budget if it weren't for opposition pressure. Be sure to check out the comments from other readers and leave your thoughts as well.


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Bank of Canada suggests Canada will emerge from recession ahead of peers

Canada will emerge from recession on a stronger footing than other major economies that are burdened with weaker financial systems, Bank of Canada Governor Mark Carney said on Tuesday.

While Canada's recovery in part will depend on the progress of other major economies, domestic growth will outpace growth in other countries reeling from the global economic slowdown, Carney said after a speech in Halifax, Nova Scotia.

"In terms of growth in 2010, we expect, subject to the stabilization of the global financial system ... that most of the major economies are going to grow," Carney said.

"We expect Canadian growth to be stronger than those other economies in part because we don't have those overhangs of imbalances and lagged effects of a recovery in our financial system than those other economies have."

Carney, speaking a week after the central bank lowered its key overnight rate to a 50-year low of 1 percent, said the domestic economy will begin recovering later this year as a series of interest rate cuts begin to take hold.

His comments mirrored projections released by the bank last week when it unveiled its quarterly economic update. The bank said Canada's economy would contract by 4.8 percent annualized in the first quarter, 1 percent in the second and then return to growth.

Carney also said additional measures to shore up financial systems in a number of other jurisdictions are still necessary, but added that Canada does not have the same fundamental problems.

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GDP signals deepening recession

Canada's economy shrank more than expected in November as businesses across most sectors clipped back production, suggesting the recession that started in the fourth-quarter is steeper than expected.

The economy contracted 0.7 percent in the month, the biggest drop in five years, as feeble global demand forced cuts and layoffs in manufacturing, construction, wholesale and real estate industries, Statistics Canada said on Friday.

In the worst year-over-year performance since August 1991, the economy shrank 0.8 percent compared with November 2007. The Canadian dollar strengthened slightly after the data.

Economists, surprised by the swift deterioration from a 0.1 percent decline in October, now expect the fourth-quarter contraction of close to 3 percent. That compares with the Bank of Canada's latest projection of a 2.3 percent decline.

"The prognosis for fourth quarter GDP is not looking particularly good," said Charmaine Buskas, senior economics strategist for TD Securities.

"The decline in economic activity has been increasingly broad based and suggests that recession's grip on the Canadian economy is indeed, strong," she said.

Analysts in a Reuters poll had called for a 0.4 percent decline.

The Canadian data came at the same time the United States reported its economy shrank at its fastest pace in nearly 27 years in the fourth quarter. GDP plummeted at a 3.8 percent annual rate.

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