Governments Expect Canada's Economy To Create More Jobs
THE meeting May 31 of Canada's 11 finance ministers, one from the federal government and one from each of the 10 provinces, was just about over when the news broke.
The group was there to discuss what could be done about the state of the economy when the latest growth statistic hit the wires: Canada's economy grew by 0.7 percent in the month of March alone, the biggest monthly jump in almost two years. Growth in the first quarter was one full percentage point.
The figures were beyond expectation. The budgets drawn up by the federal and provincial governments were based on forecasts of 2.9 percent growth this year. If first-quarter growth continues, Canada's 1993 growth rate could be 4 percent.
"It's showing signs of a more broadly based recovery than we've seen over the past half year and I think that's a very good sign of things to come," says Jason Myers of the Canadian Manufacturers' Association. Growth was strongest in the manufacturing sector, particularly in the industrial heartland of Ontario, the region hit hardest in the past three years of recession and sluggish growth.
The ministers met in Ottawa to deal with the national debt, a staggering total of $700 billion (Canadian; US$551 billion), as a result of government deficits.
The provincial ministers of finance called for lower interest rates to stimulate the economy, and asked John Crow, governor of the Bank of Canada - the central bank - to stop fighting inflation.
"What we are expecting from the Bank of Canada is a monetary policy that is comparable with the economic situation," says Quebec's minister of finance, Gerard Levesque. "We have to realize interest rates are too high." Interest rates in Canada, while slightly higher than in the United States, are at a 21-year low.