“This morning, Statistics Canada reported that real gross domestic product was up slightly in the second quarter.  As expected, the pace of economic activity remains weak as a result of the U.S. slowdown and its impact on our export sector.  For 2008 as a whole, I expect real GDP to increase by about 1 per cent”. 

He went on to say that the expected “growth in income and employment in the second quarter should help support economic activity going forward” thereby putting Canada in a better position that most other countries to withstand the economic uncertainty that we are all affected by.  “Canada’s economic fundamentals remain solid:

·         Our unemployment rate remains near a 33-year low;

·         Our budget is balanced and in fact there was a budgetary surplus of $1.7 billion in the month of June;

·         In addition, real income has increased by more than 4 per cent at an annual rate over the first half of this year. This is income available to Canadians for consumption or investment;

·         Canada’s household, business and financial sectors are strong;

·         Canada’s housing market is sound and interest rates are low; and

·         Core inflation is low and stable.

In addition, the “Actions taken by our government since 2006 will provide $21 billion in incremental tax relief—equivalent to 1.4 per cent of GDP—to Canadians and Canadian businesses this year alone, when it is needed most. This is a permanent structural tax change, unlike the temporary measures in the United States.” 

Canada is well ahead of the game and has implemented strategies to circumvent the fallout of this global financial uncertainty, “in fact, federal personal income tax refunds this year were almost $200 or 14 per cent higher than last year thanks to our tax relief measures. In addition to the stimulus provided by the reductions in personal income tax and business taxes, we have other advantages with respect to the planned business tax reductions through 2012,” which again re-confirms Canada’s financial stability.

This is not to say that we are completely unaffected as “we are facing some significant economic challenges. Canadians understand that Canada is not an island. This is a global phenomenon. The global economy overall is slowing” and “we are feeling the impact of global economic factors—including a struggling U.S. economy, and of course the U.S. is our largest trading partner.”  In saying this, “we recognize that the key to a stronger economy is creating an environment that encourages investment and spurs further job creation” which is why “we have made permanent broad-based tax reductions” and is also why we are investing in priorities: in post-secondary education, infrastructure and worker retraining” and “creating centres of excellence in science and technology.” 

Canada is being responsible and is taking the necessary courses of action by implementing long term strategies to improve competitiveness and productivity and this will ultimately have a positive impact on Canadians and the Canadian economy.

MBN Mortgage

Mortgage Intelligence Inc.