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Canada ‘likely’ headed into recession but will fare better than many other economies, says Carney

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Former Bank of Canada and Bank of England governor Mark Carney says Canada likely will head into a recession next year but will fare better than many other countries and bounce back faster because of its strong economic fundamentals.

Carney made the comments before the Senate committee on banking, commerce and the economy Thursday. He also explained to parliamentarians why he thought outgoing U.K. Prime Minister Liz Truss’s mini-budget caused so much financial turmoil in her country.

“I think a recession is both likely globally and most probable in Canada,” Carney said.

“I would put it this way — I’m afraid it’s a bit like air travel these days. We know where we’re headed, we just don’t know when we are going to get there, so there’s some uncertainty about the exact time.”

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Carney told senators that China is “effectively in recession” now. Europe, he said, is entering a recession and the U.K. is already in one — and while the United States’ economic momentum is propping up Canada, it will be in recession “at some point” next year.

“It will be hard for us, [given] those accumulative factors, for Canada to be a full exception from that,” he said. “The combination of all of that is likely to lead to a recession, at least a few quarters of negative growth in Canada.”

That prediction is darker than the one Pierre-Olivier Gourinchas, chief economist for the International Monetary Fund, gave to CBC’s Rosemary Barton Live in an interview airing Sunday.

“We have a slowdown that we’re projecting in Canada,” Gourinchas told Barton. “We’re seeing growth coming down to about 1.5 per cent next year, so that’s a downward revision.

“The Canadian economy has been doing well in the rebound but it’s buffeted by the same winds that are affecting the global economy.”

Gourinchas said that while unemployment in Canada and the U.S. will rise in the coming years, both labour markets are very strong and unemployment should “hopefully remain fairly modest.”

Canada to recover faster: Carney

Carney cited a strong labour market and low unemployment as reasons why Canada will do better than other countries in weathering the coming recession.

He said Canada’s job market is strong because the country’s pandemic benefits, such as the Canada Emergency Wage Subsidy, helped to keep workers attached to their jobs, which meant Canada lost fewer jobs than other countries.

Carney also said that Canada’s international trade agreements with all other G7 countries and Pacific Rim nations will help it recover sooner.

Former Bank of Canada and Bank of England governor Mark Carney told a Senate of Canada committee that Canada likely will head into a recession next year but will fare better than many other countries and bounce back faster.

“I would see no reason that there would be any issue for our bond rating or credit rating or any sort of near term type issue,” he said.

And because the U.S. is faring better than other countries right now, Carney said, the strength of its economy should support Canada’s recovery.

“We can come out of this much stronger than others, without question, but we should be clear-eyed about what we are heading into,” he said.

“It’s a storm, not a hurricane. That’s the way I would put it.”

U.K. turmoil and basic math

Carney was also asked by senators to explain the recent financial and political turmoil in the United Kingdom.

Liz Truss announced Thursday that she was stepping down as prime minister, just over six weeks after taking the Conservative Party reins as leader. Her resignation came after Kwasi Kwarteng resigned last week as chancellor of the exchequer, the U.K.’s finance minister.

Watch: Carney weighs in on Liz Truss:

 

Carney weighs in on Liz Truss

18 hours ago

Duration 0:52

Former Bank of Canada and Bank of England governor Mark Carney says outgoing British Prime Minister Liz Truss’s failure to provide costing for her mini-budget, and her attempt to go around parliamentary institutions, undercut her credibility.

Both saw their political careers explode after Kwarteng’s so-called mini-budget on Sept. 23 sent U.K. markets into a tailspin by offering deep tax cuts without explaining how they would be funded.

“I think one of the big reasons why it failed is, it was half the story,” Carney said. “They majored on tax cuts as the solution as opposed to all the other hard work that’s necessary to build productivity over time.”

Carney said the Truss government wanted to make a “big bang” with tax cuts and funding to help British households pay for rising energy costs before delivering another budget in late November that would have filled in the holes.

Carney said that Truss was never allowed to deliver that November budget because her government’s decision to announce unfunded tax breaks made it look as if it had a “trickle down, tax-cut-only strategy.”

“Which in and of itself its not a credible strategy for a 21st century economy,” he said.

Carney said that Truss’s failure to provide costing for the cuts, and her attempt to go around parliamentary institutions such as the U.K.’s equivalent of Canada’s Parliamentary Budget Officer, undercut her credibility.

“They moved to a seven per cent of GDP deficit overnight. They already had a seven per cent current account deficit and the numbers didn’t add up. And then they acted like it didn’t matter,” he said.

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Canadian military would be ‘challenged’ to launch a large scale operation: chief of the defence staff

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OTTAWA –

Canada’s military forces are “ready” to meet their commitments should Russia’s war in Ukraine spread to NATO countries, but it would be a “challenge” to launch a larger scale operation in the long term, with ongoing personnel and equipment shortages, according to Chief of the Defence Staff Gen. Wayne Eyre.

Eyre told Joyce Napier on CTV’s Question Period in an interview airing Sunday that while the forces in Europe are “ready for the tactical mission they’ve been assigned,” he has larger concerns about strategic readiness. He said there’s a lack of people and equipment, and further concern around the ability to sustain a larger scale mission in the longer term.

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The Canadian Armed Forces are still struggling to retain staff, with nearly 10,000 fewer trained personnel than they’d need to be at full force, and equipment stocks below what they require.

“We’ve got challenges in all of those,” Eyre said, adding the numbers reflect what’s been “let slip over decades, as we’ve focused on the more immediate (needs).”

Eyre said Canada’s military would be “hard pressed” to launch another large-scale operation like it had in Afghanistan, as an example, without having to redistribute its resources around the globe, as threats evolve.

“The military that we have now is going to be increasingly called upon to support Canada and to support Canadian interests, to support our allies overseas, but as well at home,” Eyre said, citing Russia’s invasion of Ukraine, climate change impacting the landscape in the Arctic, and an increase in digital and cybersecurity threats.

“It’s always a case of prioritization and balancing our deployments around the globe, not just with what, but when, and with who … and getting that balance right is something that that we’re working on,” he said. “Could we use more? Yeah, absolutely. But we operate with what we have.”

“We prioritize and balance based on what our allies need, and what the demand signals, just to make sure that we achieve the strategic effect the government wants us to achieve,” he also said.

Meanwhile Defence Minister Anita Anand said on CTV’s Question Period last week that Canada should “be able to walk and chew gum at the same time,” and balance its NATO commitments with securing the Arctic and promoting peace in the Indo-Pacific.

Eyre said his number one priority is getting Canada’s armed forces up to full strength, with an attrition rate of 9.3 per cent between both regular and reserve forces, up from 6.9 per cent last year. The Canadian Armed Forces Retention Strategy was released just last month.

“We are facing the same challenge that every other industry out there is facing in terms of a really tight labor market,” Eyre said. “Every other military in the West is facing the same challenge.”

He explained the organization is working on streamlining its recruitment process, among other changes, to meet the increasing need, with the goal to get numbers up “as quickly as possible.”

“Ideally, would have been yesterday,” he said. “We’re looking at where we can accelerate the recruiting, the training, and optimizing our training pipeline.”

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How soccer is evolving in Canada

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Soccer wasn’t really a thing when I was a kid. I grew up in the 1970s and ‘80s. Sure, we all had soccer balls. And we played a lot of what should be more accurately called, Kick and Run. But I – and all my friends – did not really know the rules, the teams or the players. We might’ve heard of Pelé, but not more than that.

We followed hockey, baseball, football (CFL and NFL) and basketball, in that order. I did occasionally watch soccer on TV, but that was because we didn’t have a lot of channels and the soothing English accents often lulled me to sleep.

Things are much different now. My 13-year-old son is a massive soccer fan. He plays on a team three or four times a week. His schoolmates include a lot of second-generation Canadians, whose parents came from soccer-obsessed nations. He watches Premier League and Championship League matches. He’s watches La Liga and Bundesliga. He watches World Cup qualifiers and could tell me the backstory on most of the players. In fact, he watches classic games on YouTube and plays FIFA22 on his PS4 and as a result, knows more about Pelé than I ever did. But, because of him, I now watch enough football to know a game is a match, a goalie is a keeper and I know which plays end up in corner kicks or throw-ins.

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I once asked him, “How well do you know the Germany national team?” and he said, “Not very well.” He then proceeded to name seven of their 11 starters. It’s a different world.

I still know almost nothing compared to the other soccer dads, but like millions of Canadians, I watched Canada’s qualifying matches and I know we have a great team, with some stellar players who are worth watching. The qualifying matches regularly beat both hockey games and CFL football when it comes to viewership.

But we should care about more than just the matches themselves. The World Cup is one of the biggest and most lucrative sports spectacles on Earth. This will be the first one hosted in the Middle East. And although Qatar may look shiny and new on TV, it’s mired in what many Western nations believe to be medieval and backwards policies on working conditions, LGBTQ2S+ and women’s rights.

Finding people to talk about it in Qatar is NOT easy. One of W5’s goals this week was to talk to migrant workers to describe how they were treated, their living conditions and their labour rights. Most were too afraid to talk to us.

And to confound things, there have been many stories of journalists being detained or arrested for reporting on migrant workers. Last week, a Danish reporter was live on TV from Qatar and when asked what things were like there, he directed his camera operator to pan left – revealing security officials in golf carts, who immediately tried to stop the live hit. The next day Qatari officials apologized, but the message was clear: we can stop you from reporting when we want. It’s a fascinating video that’s been viewed millions of times around the globe.

The Qatari government denies they’ve put any restrictions on media. In a tweet, the Supreme Committee for Delivery and Legacy says “several regional and international media outlets are based in Qatar, and thousands of journalists report from Qatar freely without interference each year.”

Not everyone is convinced. Qatar ranks 118 out of 180 countries in the 2022 Press Freedom index, published by Reporters Without Borders. Freedom House, which is a U.S.-based freedom watchdog, gives Qatar a 25 out of 100 score on Global Freedom, which includes freedom of expression. (Canada ranks 98 and the US ranks 83).

A Reuters Institute column from last week on press freedom in Qatar suggests authorities obscure press freedom laws, by hiding behind trespassing laws.

“One of the most common risks when doing journalistic work in Qatar is to be accused of trespassing. This is what Halvor Ekeland and Lokman Ghorbani of Norwegian state broadcaster NRK were accused of when they were arrested by officers of Qatar’s Criminal Investigations Department in November 2021, while covering World Cup preparations. The journalists were held for over 30 hours before being released without charge. They deny they were filming without permission,” says the article.

A little insider info: I have personally written, “we don’t want you to get arrested, but…” at least twice in correspondence with our team in Qatar. I’ve never encouraged anyone to break the law of course, but sometimes doing our jobs leads police or security into thinking they have a duty (or at least a right) to stop you.

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Don’t have a cow: Senator’s legen-dairy speech draws metaphor from bovine caper

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OTTAWA — Haven’t you herd? A dramatic tale of 20 escaped cows, nine cowboys and a drone recently unfolded in St-Sévère, Que., and it behooved a Canadian senator to milk it for all it was worth.

Prompting priceless reactions of surprise from her colleagues, Sen. Julie Miville-Dechêne recounted the story of the bovine fugitives in the Senate chamber this week — and attempted to make a moo-ving point about politics.

“Honourable senators, usually, when we do tributes here, it is to recognize the achievements of our fellow citizens,” Miville-Dechêne began in French, having chosen to wear a white blouse with black spots for the occasion.

“However, today, I want to express my amused admiration for a remarkably determined herd of cows.”

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On a day when senators paid tribute to a late Alberta pastor, the crash of a luxury steamer off the coast of Newfoundland in 1918 and environmental negotiators at the recent climate talks in Egypt, senators seated near Miville-Dechêne seemed udderly taken aback by the lighter fare — but there are no reports that they had beef with what she was saying.

Miville-Dechêne’s storytelling touched on the highlights of the cows’ evasion of authorities after a summer jailbreak — from their wont to jump fences like deer to a local official’s entreaty that she would not go running after cattle in a dress and high heels.

The climax of her narrative came as nine cowboys — eight on horseback, one with a drone — arrived from the western festival in nearby St-Tite, Que., north of Trois-Rivières, and nearly nabbed the vagabonds before they fled through a cornfield.

“They are still on the run, hiding in the woods by day and grazing by night,” said Miville-Dechêne, with a note of pride and perhaps a hint of fromage.

She neglected to mention the reported costs of the twilight vandalism, which locals say has cost at least $20,000.

But Miville-Dechêne did save some of her praise for the humans in the story, congratulating the municipal general manager, Marie-Andrée Cadorette, for her “dogged determination,” and commending the would-be wranglers for stepping up when every government department and police force in Quebec said there was nothing they could do.

“There is a political lesson in there somewhere,” said the former journalist.

Miville-Dechêne ended on what could perhaps be interpreted as a butchered metaphor about non-partisanship: “Finally, I would like to confess my unbridled admiration for these cows that have found freedom and are still out there, frolicking about. While we overcomplicate things, these cows are learning to jump fences.”

This report by The Canadian Press was first published Nov. 26, 2022.

 

Marie-Danielle Smith, The Canadian Press

 

 

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