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As IMF warns of economic slowdown, Canada’s labour market could be critical buffer

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Canada will fare better in the year ahead than some other global economies amid dire warnings Tuesday from the International Monetary Fund (IMF) about a looming downturn, according to economists who spoke to Global News.

 

The IMF revised down its World Economic Outlook on Tuesday, citing a “combination of shocks” that would “stall” major economies.

Global GDP growth next year is expected to slow to 2.7 per cent, compared to the 2.9 per cent forecast in July, the IMF said, as higher interest rates weigh on the U.S. economy, Europe struggles with spiking gas prices and China contends with continued COVID-19 lockdowns and a weakening property sector.

Canada’s GDP growth will slow to 1.5 per cent next year, down 0.3 percentage points from the summer’s forecasts, the IMF forecasts.

“In short, the worst is yet to come, and for many people, 2023 will feel like a recession,” said IMF Chief Economist Pierre-Olivier Gourinchas in a statement Tuesday.

 

Will Canada hit a recession?

Pedro Antunes, chief economist of the Conference Board of Canada, told Global News on Tuesday that the IMF’s revised projections showing a more pronounced slowdown are not necessarily bad news.

The forecast for 2.7 per cent global economic growth next year is only slightly down from the typical three per cent annual growth, Antunes notes, and points to the early success of tightening cycles from the Bank of Canada and its central bank counterparts globally.

“Despite all of the dire warnings that we’re hearing in that (IMF) report, I think what it’s telling us is, their baseline outlook is for this kind of successful monetary policy, soft landing. And we think for Canada, that means still positive growth,” Antunes says.

He added that Canada is “definitely sensitive” to economic headwinds beyond its borders, especially any disruption from the United States, the nation’s largest trading partner.

Global fears of a recession are among the forces pushing up the value of the U.S. dollar, Antunes says, as investors seek “refuge” in the reliable greenback.

That’s driving the Canadian dollar down by comparison, he says, making imports from south of the border more expensive for consumers in turn.

While Antunes predicts consumer spending will be “soft” for the next few quarters amid the weak loonie and rising interest rates dampening demand, he does not at this point expect Canada to fall into recession — traditionally defined as two consecutive quarters of negative growth.

Antunes says that if global inflationary pressures continue to abate, as the IMF predicts, the Bank of Canada will be able to pause its interest rate hikes next year and allow the higher cost of borrowing to slow growth without entirely snuffing it out.

It’s only if inflation proves persistent through next year and the central bank is forced to keep raising its policy rate, that the odds of a recession — perhaps in early 2024, he suggests — grow.

Others have a more pessimistic view.

Deloitte is among those forecasting a moderate recession to strike the country in 2023.

Deloitte Canada’s chief economist, Craig Alexander, told Global News last week that global economic pain will inevitably drag down Canada’s output.

“We will import the weakness that is outside of our borders, and that is before the impact of the higher interest rates here in Canada that are weakening our real estate market and dampening consumer spending,” he said.

Deloitte is projecting a recession in Canada to last only two or three quarters before returning to growth.

 

Will it ‘feel’ like a recession in Canada?

While Antunes and Alexander disagree on whether Canada will catch the window for a soft landing, both say that any slowdown will be mitigated because of the country’s tight labour market.

Oftentimes, Canadians experience the “pain of a recession” through layoffs and rising unemployment, Antunes says.

But with the unemployment rate sitting at a low 5.2 per cent in September and many businesses unable to fill vacancies, he argues any downturn might see employers “reticent” to let go of workers, lest they be unable to replace them when economic growth returns.

Alexander, too, says that as he’s been speaking to businesses and sharing his forecasts for a contraction, he’s heard in response that many employers will be “hoarding labour” even as the outlook darkens.

“They’re not going to shed workers like they would normally during a period of economic weakness because of the fear that these labour shortages will be back with us very quickly,” he says.

“For Canadians, it may not feel like much of a downturn, and that could create some resilience in the economy.”

— With files from Global News’ Eric Sorenson, Reuters

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B.C. court allows police to apply to dispose of evidence from Robert Pickton’s farm

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VANCOUVER – A B.C. Supreme Court judge says it has jurisdiction to order the disposal of thousands of pieces of evidence seized from serial killer Robert Pickton’s pig farm decades ago, whether it was used in his murder trial or not.

A ruling issued online Wednesday said the RCMP can apply to dispose of some 15,000 pieces of evidence collected from the search of Pickton’s property in Port Coquitlam, including “items determined to belong to victims.”

Police asked the court for directions last year to be allowed to dispose of the mountain of evidence gathered in the case against Pickton, who was convicted of the second-degree murder of six women, although he was originally charged with first-degree murder of 27 women.

Pickton died in May after being attacked in a Quebec prison.

Some family members of victims disputed the disposal because they have a pending civil lawsuit against Pickton’s estate and his brother, David Pickton, Yand want to ensure that the evidence they need to prove their case is not dispersed or destroyed.

The court dismissed their bid to intervene in July this year, and the court has now ruled it has the authority to order the disposal of the evidence whether it was used at Pickton’s trial or not.

The ruling says police plan to “bring a series of applications” for court orders allowing them to get rid of the evidence because they are “legally obligated to dispose of the property” since it’s no longer needed in any investigation or criminal proceeding.

Justice Frits Verhoeven says in his ruling that there may be reason to doubt if the court has jurisdiction over items seized from the farm that had not be made exhibits.

But he said that will be a decision for later, noting “the question as to whether the court retains inherent jurisdiction to order disposal of seized items may remain to be considered, if necessary, in some other case.”

Jason Gratl, the lawyer representing family members of victims in the civil cases against the Pickton brothers, said in an interview Wednesday that the latest court decision doesn’t mean exhibits will be destroyed.

“Any concern about the destruction of the evidence is premature. Just because the court will hear the application to allow the RCMP to destroy the evidence does not mean that the court would grant the application,” he said.

Gratl said that if the RCMP brings an application to get rid of evidence that could be useful in proving the civil cases, he would ask the court for the evidence.

“We would be seeking to take possession of any evidence that the RCMP no longer wants in order to prove that civil claim,” he said.

Gratl said no date has been set for when the civil cases will be heard.

The court’s earlier ruling says the RCMP has agreed to allow some of the civil case plaintiffs “limited participation” in the disposal application process, agreeing to notify them if police identify an “ownership or property interest in the items” that they’re applying to destroy.

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.



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Democrats devastated by Vice-President Kamala Harris’ defeat |

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Supporters of Vice-President Kamala Harris say they are devastated the Democratic party leader lost the United States presidential election. Harris was set to address Democrats at her alma mater Howard University in Washington, D.C. after conceding the race in a phone call with Donald Trump. (Nov. 6, 2024)



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Democrat Elissa Slotkin wins Michigan’s open Senate seat, defeating the GOP’s Mike Rogers

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DETROIT (AP) — Democratic U.S. Rep. Elissa Slotkin has won Michigan’s open U.S. Senate seat, giving Democrats a bittersweet victory in a swing state that also backed Republican President-elect Donald Trump in his successful bid to return to the White House.

Slotkin, a third-term representative, defeated former Republican congressman Mike Rogers. Democrats have held both Senate seats in Michigan for decades, but this year were left without retiring incumbent Sen. Debbie Stabenow.

Michigan’s was among a handful of Senate races Democrats struggled to defend. They lost their U.S. Senate majority despite Slotkin’s narrow win.

The race was incredibly close. Just minutes before it was called for Slotkin, she addressed supporters in Detroit, acknowledging that many voters may have cast their ballots for her while also supporting Trump, who won the state’s electoral votes over Democrat Kamala Harris.

“It’s my responsibility to get things done for Michiganders. No matter who’s in office, just as I did in President Trump’s first term,” said Slotkin. “I’m a problem solver and I will work with anyone who is actually here to work.”

Slotkin’s win provides some solace for Democrats in the state, many of whom entered Election Day with high confidence following sweeping victories in the 2022 midterms. Democrat Gov. Gretchen Whitmer still controls the executive branch and Democrats held onto the Senate, but their state House majority was in peril.

And Republicans also captured a mid-Michigan seat vacated by Slotkin, considered one of the most competitive races in the country.

Slotkin, a former CIA analyst and third-term representative, launched her Senate campaign shortly after Democratic Sen. Debbie Stabenow announced her retirement in early 2023. With a largely uncontested primary, Slotkin built a significant fundraising advantage and poured it into advertising. Her high-profile supporters included former President Barack Obama and Stabenow, who helped her on the campaign trail.

On the Republican side, Rogers faced multiple challengers for the party’s nomination, including former Reps. Justin Amash and Peter Meijer, the latter of whom withdrew before the Aug. 6 primary. Rogers served in the U.S. House from 2001 to 2015 and chaired the House Intelligence Committee.

Trump won Michigan in 2016 by just over 10,000 votes, marking the first time a Republican presidential candidate had secured the state in nearly three decades. This time, he expanded that margin to about 80,000 votes.

Slotkin and other Michigan Democrats focused much of their campaigns on reproductive rights, arguing that Republican opponents would back a national abortion ban, although Rogers said he wouldn’t. How effectively the issue motivated voting in a state where reproductive rights were enshrined in the constitution by Michigan voters in 2022 remained to be seen on Election Day.

About 4 in 10 Michigan voters said the economy and jobs is the top issue facing the country, according to AP VoteCast, a sweeping survey of more than 110,000 voters nationally, including about 3,700 voters in Michigan. About 2 in 10 Michigan voters said immigration is the most pressing issue, and roughly 1 in 10 named abortion.

Slotkin used her funding advantage to establish her narrative early, aiming to connect both with her base and disillusioned Republicans.

“For the Republicans who feel like their party has left them over the last few years, you will always have an open door in my office,” Slotkin said during their only debate.

The Canadian Press. All rights reserved.



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