United States Secretary of State George P. Shultz, who arrived here Sunday for two days of talks, will probably be the first senior American official in a year or more to hear a kind word from Canadians about President Reagan's economic policies.
For many months, the US government has fielded constant complaints about its restrictive monetary policy, which is part of the reason Canada is suffering through its worst recession in 40 years. But since August, when American authorities began to ease their grip on their own interest rates, Canadian borrowing rates have fallen dramatically and given this country a long-awaited ray of hope about the economy.
If and when business conditions in the US improve, Canada's economic climate, which is inextricably linked to that of its large neighbor, will also pick up. But the depth of the current business slump dictates a long and hard road back for Canada.
Prime Minister Pierre Trudeau, whose popularity has been devastated by fallout from the recession, said Canadians confront a challenge ''unlike any our generation has faced'' in the task of rebuilding the country's industrial strength.
The past year has brought unrelenting bad economic news. Most grievous of all has been the burgeoning number of unemployed. By September, the unemployment rate reached an unprecedented 12.2 percent; consumer and business demand has tumbled in the unexpectedly severe recession. As a result, economic production the past year fell a whopping 6 percent, the worst performance of any major industrialized nation.
All over Canada, shops and stores have been boarded up as business bankruptcies in the first half of 1982 almost doubled from the previous year. Corporate profits in the April-to-June period dipped by 58 percent compared with 1981. And, with its tax revenues shrinking and payments to the unemployed and welfare recipients mounting, the federal goverment divulged that its deficit for the year was headed above $20 billion (US dollars) compared with a forecast of about $10 billion.
''It appears to us that, instead of dealing with inflation, as was intended, the government has evolved a successful formula for precipitating a major depression in this country,'' a group of 80 economists said in a statement released last week.