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That about sums it up.

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Found in the web site of my local Liberal candidate, dated 17/06/2008:

“Canada's economy is in retreat,” said Liberal Finance Critic John McCallum. “Consumer confidence is plummeting. Two thousand jobs were lost at Air Canada today, and Canada's productivity is lower than when this government took office. “Will [the Prime Minister] at least take responsibility for leading Canada to its unenviable position as the only shrinking G7 economy?”

What do you make of this?

McCallum's comments are alarmist. There are trouble spots in Canada's economy, but we're not in a recession, the job market has strength, and consumers, if not confident, are still spending (auto sales are case in point). Our trade surplus is strong, and we're still in the black for current account. Manufacturing is hurting no doubt, and we'd be wise to keep as many factories open as possible even if it means government making deals to keep key factories open like in the case of Navistar in Chatham (I know that will be a controversial statement). Infrastructure spending can be a stimulus and will help productivity.

Nevertheless, Canada's fundamentals are strong - something I think we can say justifiably though George Bush couldn't. The difference? Jobs (we're not bleeding them the same way), financial sector (with the exception of CIBC, Canadian Banks are in no trouble) and government finances.

One question though - is Canadian productivity lower than in 2006? Any good source for numbers/analysis on this?

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