Corpcentre's Blog

December 18, 2009

Canadian PM: Stimulus Package Temporary

Filed under: canada economy,global economic growth,recession — corpcentre @ 4:14 pm
On a recent official visit to China, Canadian Prime Minister Stephen Harper took the opportunity to use a press conference as a venue for giving a Canadian economic update and to send messages home about the Canadian government’s stimulus package.
 
The timing of the report may have seemed slightly peculiar but a portion of the diplomatic visit was dedicated to promoting Canadian business, investments and trade with China. Harper hopes that this trip will improve and expand business opportunities with China. Canada’s relationship with China is the country’s second largest, aside from the U.S. Bilateral merchandise trade with China tops $53 billion a year, although China exports four times as much as it imports from Canada. China has lifted a ban on pork import from Canada, a $50 million potential market, but this is still far from an equal balance.
 
Mr. Harper sent a message home that the government’s stimulus program has given a jump-start to the economy but Canadians should be aware that it is a temporary program. The government has warned that stimulus funds must be spent by March 2011 or will be lost. Government officials are quick to point out that termination of the stimulus funds will allow the current projected deficit of $57 billion to be cut in half. Opponents of the government, though, point out that trimming the deficit is not the only issue at hand.
 
The stimulus package was designed to help a recession struck nation by providing employment for Canadians. Critics note that the Harper government has not released figures on how many jobs were created through the stimulus programs. Furthermore, Statistics Canada announced that the economy had grown by only 0.4 per cent in the third quarter, a rate slower than most of the Group of Seven countries.
 
Mr. Harper paints a picture of cautious optimism yet it remains unclear whether Ottawa has indeed managed to invigorate an ailing economy.

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December 7, 2009

Is There An Employment Boom?

Recently released statistics by Statistics Canada indicated positive employment figures for November 2009. But, is the picture truly as rosy as it appears?
 

According to the figures, Canada’s unemployment rate dropped by one-tenth of a percent from October, reducing the rate to 8.5 per cent. Full time jobs increased by 39,000, while part time employment increased by 40,000. While these 79,000 new jobs indicate a strong pick-up in the labour force and, subsequently reflect on a steady recovery of the nation’s economy, there are a few factors to consider that may curb the euphoria.
 

First, it should be pointed out that economists agree that this pace of job growth is entirely inconsistent with the current pace of economic recovery.

Next, economists are concerned that the total hours worked declined by 0.3 per cent. In other words, more Canadians are working but less work hours are being paid. Simply put, Canadians are bringing home less money.
 
Another point noted is that almost all the new jobs – 73,000 positions – were in the service sector, primarily in educational services. It is quite possible that this gain may be an abnormal seasonal adjustment. December, therefore, may be far less positive in terms of actual job gains.
 
Economists are also concerned about weak job productivity as a result of various factors compounded to negatively impact workers’ motivation.
 
Finally, self-employment fell by 32,000 jobs in November. In theory, this drop can be viewed positively. In a weak economy, self-employment gains are generally discounted. They are viewed as a fallback for unemployed Canadians who have no choice but to start their own businesses in lieu of regular work.
 
Is the Canadian job market truly on the mend? Only time will tell.

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November 9, 2009

Defying the Economic Downturn

Throughout the last year or so, volumes have been written about the global recession. Every economist has an opinion and every analyst has a theory. Of course, one cannot ignore the politicians who have opinions, theories, and rhetoric as well.
 
     The fact is that most of us have been affected by the recession in one way or another. For some, it may mean that their favourite neighbourhood store closed its doors. For others, the effect may have been more severe, either through unemployment or a reduction of savings.
 
     Whatever one’s situation may be, the question is what the best reaction is. That is not to say that there are immediate solutions to all problems. For many, it may take quite a while to bounce back from the recession. But, is it enough to be passive and wait for the economic climate to improve or can one use this period of time to one’s advantage?
 
     Some leaders in the business community, despite having suffered financial losses, feel that this period of economic slowdown is an ideal time to promote leadership growth, to gain a tighter focus on business, and to implement new business-model improvements. Use this time to tighten the reins and strengthen one’s business in order to emerge stronger and more cohesive when the slump ends.
 
     One way to tighten the reins is to focus on your business and set several clear and simple goals. Do those small things consistently and do them well. By re-establishing your methods through redefined goals, you will foster improvement. And, believe it or not, improvement is contagious. Create a positive future outlook and your employees will get the spirit. The re-energized team will be in place when the economy turns around.
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September 13, 2009

Leaving Your Purchases at the Checkout

Let’s be honest; most of us have done it. Embarrassing as it might be, most people have removed an item from their shopping cart while waiting in line at the checkout. It used to be merely changing your mind, or realizing you took the wrong item off the shelf. Today, it is a totally different phenomenon. In today’s rocky recession climate, people are tightening their belts. Some are doing it out of necessity while others are adopting a more cautious attitude. Whatever the reason, more people these days are careful of what they purchase. They come to the store with a list of needs, not wants, accompanied by a specific budget. If the tally should move above their available funds, something comes out of the cart.

As yet, there are no hard statistics for this latest trend. However, more and more stores are reporting a growing number of un-purchased items at the cash register, either removed by shoppers as they wait in line or removed by the cashier at the shopper’s request upon seeing their balance.

Shoppers have also begun arranging their purchases. Health care and other basic necessities are the first to go through. If there is enough money in the wallet, the frivolous items go through last.

It’s not just a question of cash. Credit card purchases have also been affected. Credit card companies used to allow customers to exceed their credit limits by up to 10 percent. No longer! Purchases that exceed the credit limit even slightly are being denied. Consumers wishing to avoid that embarrassment simply remove some items to keep their balance lower.

Internet shopping has become victim to the same trend. Research estimates indicate that as much as 59 percent of online purchases are being dumped before checkout. Much of this is attributed to the costs that are tacked on as one proceeds through various steps, including taxes, handling fees, and shipping charges. Some internet companies are reducing the number of steps in a purchase, as well as posting the costs up front, in order to retain customers.

Hopefully, the days of changing one’s mind will soon return.

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July 14, 2009

Canadian economy not to be outdone – Part I

The International Monetary Fund, which released a report at the same time as the G8 summit convened, believes Canada is capable of the most improvement in her economy for 2009 and 2010 compared to almost all industrialized nations. Though some leaders at last week’s G8 summit are pushing for more stimulus money, other economic experts don’t think they will be necessary in Canada.

Despite expectations of a slight shrinking for the world’s economy this year (1.4%), IMF has a positive outlook for the end of the recession in 2010, calling for 2.5% global economic growth next year, up more than .5% from their predictions last April.

Other industrialized countries’ economies are expected to decrease by 3.8% this year, in comparison to Canada, only expected to drop by 2.3%. Only .8% growth is predicted for the US for 2010, half that of Canada’s forecasted gain of 1.6%, which is only second in line to Japan’s 1.7%. India and China, top consumers of Canadian raw materials are seen as leading in growth for 2010, set to increase by 6.5% and 8.5%.

Even though they feel that emergence from the recession will be on the slow side, “Financial conditions have improved more than expected, owing mainly to public intervention, and recent data suggest that the rate of decline in economic activity is moderating,” the IMF commented.

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