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.”
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.”
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.”
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:
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.
PORT ALBERNI, B.C. – RCMP say the body of a second person has been found inside their vehicle after a road washed away amid pouring rain on the west coast of Vancouver Island.
Police say two vehicles went into the Sarita River when Bamfield Road washed out on Saturday as an atmospheric river hammered southern B.C.
The body of the other driver was found Sunday.
More coming.
The Canadian Press. All rights reserved.
The B.C. Greens say Sonia Furstenau will be staying on as party leader, despite losing her seat in the legislature in Saturday’s provincial election.
The party says in a statement that its two newly elected MLAs, Jeremy Valeriote and Rob Botterell, support Furstenau’s leadership as they “navigate the prospect of having the balance of power in the legislature.”
Neither the NDP led by Premier David Eby nor the B.C. Conservatives led by John Rustad secured a majority in the election, with two recounts set to take place from Oct. 26 to 28.
Eby says in a news conference that while the election outcome is uncertain, it’s “very likely” that the NDP would need the support of others to pass legislation.
He says he reached out to Furstenau on election night to congratulate her on the Greens’ showing.
But he says the Green party has told the NDP they are “not ready yet” for a conversation about a minority government deal.
The Conservatives went from taking less than two per cent of the vote in 2020 to being elected or leading in 45 ridings, two short of a majority and only one behind the NDP.
This report by The Canadian Press was first published Oct. 22, 2024.
The Canadian Press. All rights reserved.
Toronto FC captain Jonathan Osorio is making a difference, 4,175 kilometres away from home.
The 32-year-old Canadian international midfielder, whose parents hail from Colombia, has been working with the Canadian Colombian Children’s Organization, a charity whose goal is to help disadvantaged youth in the South American country.
Osorio has worked behind the scenes, with no fanfare.
Until now, with his benevolence resulting in becoming Toronto FC’s nominee for the Audi Goals Drive Progress Impact Award, which honours an MLS player “who showed outstanding dedication to charitable efforts and serving the community” during the 2024 season.”
Other nominees include Vancouver Whitecaps midfielder Sebastian Berhalter and CF Montreal goalkeeper Jonathan Sirois.
The winner will be announced in late November.
The Canadian Colombian Children’s Organization (CCCO) is run entirely by volunteers like Monica Figueredo and Claudia Soler. Founded in 1991, it received charitable status in 2005.
The charity currently has four projects on the go: two in Medellin and one each in Armenia and Barranquilla.
They include a school, a home for young girls whose parents are addicted to drugs, after-school and weekend programs for children in a disadvantaged neighbourhood, and nutrition and education help for underprivileged youth.
The organization heard about Osorio and was put in contact with him via an intermediary, which led to a lunch meeting. Osorio did his due diligence and soon got back to the charity with his decision.
“It was something that I wanted to be a part of right away,” said Osorio, whose lone regret is that he didn’t get involved sooner.
“I’m fortunate now that to help more now that I could have back then,” he added. “The timing actually worked out for everybody. For the last three years I have donated to their cause and we’ve built a couple of (football) fields in different cities over there in the schools.”
His father visited one of the sites in Armenia close to his hometown.
“He said it was amazing, the kids, how grateful they are to be able to play on any pitch, really,” said Osorio. “But to be playing on a new pitch, they’re just so grateful and so humble.
“It really makes it worth it being part of this organization.”
The collaboration has also made Osorio take stock.
“We’re very fortunate here in Canada, I think, for the most part. Kids get to go to school and have a roof over their head and things like that. In Colombia, it’s not really the same case. My father and his family grew up in tough conditions, so giving back is like giving back to my father.”
Osorio’s help has been a godsend to the charity.
“We were so surprised with how willing he was,” said Soler.
The TFC skipper has helped pay for a football field in Armenia as well as an ambitious sports complex under construction in Barranquilla.
“It’s been great for them,” Figueredo said of the pitch in Armenia. “Because when they go to school, now they have a proper place to train.”
Osorio has also sent videos encouraging the kids to stay active — as well as shipping soccer balls and signed jerseys their way.
“They know more about Jonathan than the other players in Colombia,” Figueredo said. “That’s the funny part. Even though he’s far away, they’ve connected with him.”
“They feel that they have a future, that they can do more,” she added. “Seeing that was really, really great.”
The kids also followed Osorio through the 2022 World Cup and this summer’s Copa America.
Back home, Osorio has also attended the charity’s annual golf tournament, helping raise funds.
A Toronto native, he has long donated four tickets for every TFC home game to the Hospital for Sick Children.
Vancouver’s Berhalter was nominated for his involvement in the Whitecaps’ partnership with B.C. Children’s Hospital while Montreal’s Sirois was chosen for his work with the Montreal Impact Foundation.
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This report by The Canadian Press was first published Oct. 21, 2024.
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