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.
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
Afghan refugees: Government delays increasing financial pressure – CTV News
Refugee advocates are raising concerns that Afghan refugees granted asylum in Canada are being burdened by escalating costs stemming from the government’s delay in processing their claims.
Before they board their flight to Canada, all refugees are required to sign a loan agreement to pay back the cost of their transportation and pre-arrival expenses which can include hotel stays.
Some Afghans identified by Immigration, Refugees and Citizenship Canada as eligible for resettlement have been waiting months for exit permits while living in hotels arranged by the government. The hotel bills can add thousands of dollars to their debt.
The Canadian Council for Refugees says Afghans are being forced to pay for an inefficient bureaucracy.
“It seems like the Canadian government is taking advantage of the vulnerability of people,” says Janet Dench, executive director of the Canadian Council of Refugees. Hotel bills can add thousands of dollars to their government debt.
Dench says refugees have no choice but to accept a “legally dubious” contract that doesn’t stipulate a precise loan amount.
“If they want a permanent home they have to sign on to whatever the terms of the agreement are. There’s no negotiation room, so people are forced into this situation.”
LONG WAITS AND BIG BILLS
Because Canada doesn’t recognize the Taliban government Afghans must get to a third country with consular support to complete their refugee applications. Many flee to neighboring Pakistan where Canada has a High Commission in the capital of Islamabad.
Nearly all Afghan refugees deemed eligible for resettlement are placed in the care of the International Organization for Migration while they are overseas.
The IOM organizes both charter and commercial flights to Canada and coordinates hotel stays for refugees as they wait for their exit permits. IOM doesn’t book flights until after IRCC has completed security and medical checks of its applicants. The organization bills the Canadian government approximately $150 per day to house and provide three meals a day for one family.
Of the 25,400 Afghans who have arrived in Canada since August 2021, IOM spokesperson Paul Dillon told CTV News in an emailed statement Friday the organizations has arranged travel for more than 22,000 of those refugees.
The claims of another 15,000 Afghans Canada committed to accepting after the Taliban took over the country have been delayed.
Irfanullah Noori, 28 and his family of five stepped off a plane at Pearson International Airport less than two months ago at the end of October. Before the Taliban took over his homeland in Noori worked as a logistics coordinator at the Kabul International Airport. He qualified for asylum because his brother served as an interpreter for Canadian soldiers.
Before being issued travel documents to Canada, Nouri, his wife and their three children, all under the age of five – stayed in an Islamabad hotel arranged by IOM for three months.
Irfanullah Noori poses with his youngest daughter on October 25, 2022 at the Pakistan International Airport before he boarded plane bound for Canada.
Before boarding his flight he signed a loan agreement. Nouri says IOM staff told him he would need to repay hotel expenses that added up to more than $13,000. That amount does not factor in the cost of flights for his family that he will also have to repay.
IRCC says 96 per cent of refugees are able to pay back the loans. Monthly payments on the interest free loans are scheduled to begin one year after refugees arrive in Canada and costs can be spread out over nine years.
The federal government puts a cap of $15,000 on each loan per family, but the Canadian Council for Refugees says this is a misleading number.
Refugee families who have older dependents may have to pay back more than the cap. That’s because dependents over the age of 22 years old, can be considered a separate family unit and required to take on a new loan. Dench says this policy puts refugees in a precarious economic position. She’s seen families fight over finances and hopes and dreams put on hold.
“You have young people who should normally be going to university and pursuing their education but they feel that they’re morally obliged to get down to work, even at a minimum wage job in order to pay off the family debt,” said Dench. She argues the Canadian government should stop requiring refugees to repay the costs of getting them to safety, no matter where they come from.
SIMILAR CLAIMS, DIFFERENT TIME FRAMES
Since the fall of Kabul in August 2021, the Veterans Transition Network has helped raise funds to get interpreters and others out of Afghanistan. Oliver Thorne, VTN’s executive director says he’s frustrated that there are huge variations how long it takes for claims to be approved between applicants with similar profiles
“Some migrants are left in the dark. They don’t know why it’s taking them an additional two, four or six months compared to another interpreter who worked with the Canadian armed forces.” Thorne says IRCC needs to hire and train more staff to speed up the processing of claims.
He’s also calling for the removal of loan requirements, especially for Afghans who assisted the Canadian armed forces.
“They protected our men and women in uniform at great risk to themselves and their families. And secondly, these are going to be Canadians. They’re going to live here in our society down the street from us, and we have nothing to gain by making their transition more difficult,” Thorne said in an interview from Vancouver.
NO DEBT RELIEF
CTV News asked the Immigration Minister if it was fair that the Canadian government was burdening Afghans with additional costs due to the government backlog.
On Friday, Sean Fraser blamed a complicated process, but acknowledged that some refugees had been stuck “for a significant period of time.’ But the minister offered few solutions other than a vague reassurance that his department was “working with Pakistani officials to make sure we’re facilitating the smooth transportation of people to Canada.”
Meanwhile Noori is struggling to make ends meet in his new Ontario home, despite finding a job a few weeks ago at the General Motors plant in Oshawa.
Hired as a data-entry clerk, Noori earns $19/hour and is trying to pick up extra shifts on the weekend so he can make his $2,000 monthly rent on a one bedroom apartment.
Even though he won’t have to start paying back his refugee loan until next year, he’s daunted by the impending bill.
“It’s expensive (here.) I work 8 hours a day and six days a week. It will be very hard for me to pay back.”
After surviving the Taliban, Noori now faces subsistence in Canada.
Children’s hospital in Newfoundland and Labrador is cancelling some surgeries
A children’s hospital in the capital of Newfoundland and Labrador is cancelling some surgeries and appointments starting Monday.
Health officials say it’s due to a high level of respiratory illness.
It is unclear how many surgeries and appointments at Janeway Children’s Health and Rehabilitation Centre in St. John‘s will be affected.
Residents who are not experiencing a medical emergency are being asked to avoid visiting an emergency department.
Slain RCMP Const. Yang cleared of wrongdoing in shooting: B.C. police watchdog
The Independent Investigations Office says after a review of all available evidence its chief civilian director determined that there are no reasonable grounds to believe Const. Shaelyn Yang committed an offence.
It says the matter will not be referred to the Crown for consideration of charges.
Yang, a 31-year-old mental health and homeless outreach officer, was stabbed to death on Oct. 18 while she and a City of Burnaby employee attempted to issue an eviction notice to a man who had been living in a tent at a local park.
Yang shot the suspect before she died, and the IIO later said Jongwon Ham underwent surgery for his injuries.
Ham has since been charged with first-degree murder in Yang’s death.
“Due to concurrent court proceedings related to the incident, the IIO’s public report will not be released on the IIO website until that process has concluded,” the IIO said in a news release.
This report by The Canadian Press was first published Dec. 3, 2022.
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