The Coming Depression
Wednesday, Dec 17, 2008
Canadian Prime Minister Stephen Harper believes a depression is possible and says he’s never seen such economic uncertainty.
Harper said the outlook for the Canadian economy is increasingly hard to read.
“The truth is, I’ve never seen such uncertainty in terms of looking forward to the future,” Harper told CTV television on Tuesday. “I’m very worried about the Canadian economy.”
When asked whether a depression might be possible, Harper answered: “It could be, but I think we’ve learned enough about depression; we’ve learned enough from the 1930s to avoid some of the mistakes that caused a recession in 1929 to become a depression in the 1930s.”
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The credit crisis and a global sell-off of commodities have slowed Canada’s resource-rich economy. Alberta’s once booming oil sands sector has cooled as every major company has scrapped or delayed some expansion plans.
The manufacturing sector in central Canada is also in trouble. Canada could lose more than 580,000 jobs within five years if Detroit’s Big Three automakers go out of business, according to an Ontario government-commissioned report.
The review, prepared for Ontario’s Ministry of Economic Development and released Tuesday, warns that the collapse of General Motors Corp., Ford Motor Co. and Chrysler LLC would send lasting shock waves through the economy.
Ontario Economic Development Minister Michael Bryant said Tuesday a proposed 3.4 billion Canadian dollar ($2.8 billion) rescue package is needed to avoid a “catastrophic” chain of events.
Harper said Canada will almost certainly be run a deficit in 2009 as the government spends billions to prop up the economy. Opposition parties tried to topple Harper’s Conservative government earlier this month after his fiscal update didn’t include a stimulus package.
This article was posted: Wednesday, December 17, 2008 at 5:04 am