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Where Canada stands if the global economy weakens – CTV News

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The latest forecast for the global economy shows a grim outlook of the world torn by the COVID-19 pandemic and Russia’s war against Ukraine.

Almost all countries are expected to experience slower growth in 2022-23 due to the ongoing Russia-Ukraine war, according to a recent report by the Organization for Economic Cooperation and Development (OECD).

With the ongoing Russia-Ukraine war, OECD recently lowered its estimates for global growth, slashing it to 3 per cent in 2022 from 4.5 per cent projected last year.

In 2023, the global growth is estimated to decline further to 2.75 per cent.

Current inflation across OECD countries in 2022 is 9 per cent, twice its earlier projections. The organization said that with the ongoing humanitarian crisis, high inflation could persist in rich countries and create food shortages for poorer ones. It called for global cooperation to prevent a food crisis by avoiding mistakes similar to those that led to the inequity in vaccine distribution.

“The price of this war is high and will need to be shared,” said Laurence Boone, the OECD’s chief economist.

The report said if the war continues to escalate, European economies relying heavily on Russian fuel may worsen, because alternative energy sources may not be enough or easy to ramp up.

“Governments also have to play a role through support targeted to those most vulnerable to rising food and energy inflation,” Ms. Boone said.

SO, WHERE DOES CANADA STAND?

Canada’s economy has largely recovered from the pandemic but the OECD report said the Bank of Canada should continue to raise its policy rate and shrink its balance sheet in order to return to its target inflation.

Along with income from high resource prices, a large part of the recovery, the report said, is due to its limited trade ties with economies that have been hit hard by the war in Ukraine.

Current inflation in Canada is 6.8 per cent– the highest since 1991 – but the country could follow the same path of the U.S. Federal Reserve’s aggressive rate hike last week, the largest since 1994.

OECD expects the Bank of Canada to move towards a faster policy tightening so that the domestic productive capacity is not strained by the rising demand.

The Bank of Canada has been raising interest rates to curb the impact of inflation.

In a recent speech in Montreal, Bank of Canada deputy governor Toni Gravelle said, “sharp rebound in global demand for goods, along with pandemic-related restrictions and some weather-related events, created the perfect storm.”

With growing demand, the federal and provincial governments should focus on strong resource revenues to reduce the public debt, while targeting temporary income support for households facing living-cost pressures, the report said.

In its recent Financial System Review, the Bank of Canada said the share of highly indebted households had risen.

“In Canada, elevated levels of household debt and high house prices remain two key interconnected vulnerabilities,” the bank said in its annual Financial System Review.

INCREASE IN THE POLICY RATE

Following the relaxation of containment measures in late January, Canada has seen large output gains in contact-intensive services and strong contributions from resources sectors, construction, and manufacturing.

But the report has warned about the supply chain disruptions, exacerbated by labour shortages and high inflation. The food and energy price rises are already reducing an average Canadian household’s purchasing power and will negatively impact private spending, even as saving rates return to more normal levels, according to OECD.

OECD said more rate rises from the Bank of Canada could help tame the price pressures and “bring the monetary policy to neutral settings, where it neither stimulates nor weighs on the economy.”

According to the OECD, Canada’s policy rate is projected to increase to 2.5 per cent by early 2023. In case of continuing inflation, the organization forecasted an additional increase in rates.

In June, a second increase of 50-basis points by the Bank of Canada brought the benchmark interest rate to 1.5 per cent.

“We are taking these large steps because inflation has been persistently high, the economy is overheating, and the risk that elevated inflation will become entrenched has increased,” Bank of Canada’s Deputy Governor Paul Beaudry said in his remarks.

STRONG GROWTH TO CONTINUE AMID EXTERNAL SHOCKS

OECD projects Canada’s real GDP is to grow by 3.8 per cent in 2022 and said the country can withstand the economic shocks from the Russia-Ukraine war since it has limited trade links with hard-hit economies.

OECD reported that most economies are relatively tight and are now experiencing labour shortages with a sharp rise in vacancies. Recent data from Statistics Canada showed that the job vacancies climbed to 957,500 in the first quarter, the highest quarterly number on record.

The pandemic resulted in huge declines in international migration which contributed to the labour shortages in some countries.

For Canada, OECD said higher immigration in the country will help ease these labour shortages and the wage pressures in supply-constrained industries.

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Quebec premier visits Cree community displaced by hydro project in 1970s

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NEMASKA – For the first time in their history, members of the Cree community of Nemaska received a visit from a sitting Quebec premier on Sunday and were able to share first-hand the story of how they were displaced by a hydroelectric project in the 1970s.

François Legault was greeted in Nemaska by men and women who arrived by canoe to re-enact the founding of their new village in the Eeyou Istchee James Bay region, in northern Quebec, 47 years ago. The community was forced in the early 1970s to move from their original location because they were told it would be flooded as part of the Nottaway-Broadback-Rupert hydro project.

The reservoir was ultimately constructed elsewhere, but by then the members of the village had already left for other places, abandoning their homes and many of their belongings in the process.

George Wapachee, co-author of the book “Going Home,” said community members were “relocated for nothing.”

“We didn’t know what the rights were, or who to turn to,” he said in an interview. “That turned us into refugees and we were forced to abandon the life we knew.”

The book, published in 2022 by Wapachee and Susan Marshall, is filled with stories of Cree community members. Leaving behind sewing machines and hunting dogs, they were initially sent to two different villages, 100 and 300 kilometres away, Wapachee said.

In their new homes, several of them were forced to live in “deplorable conditions,” and some were physically and verbally abused, he said. The new village of Nemaska was only built a few years later, in 1977.

“At this time, families were losing their children to prison-schools,” he said, in reference to the residential school system. “Imagine the burden of losing your community as well.”

Legault’s visit came on Sept. 15, when the community gathers every year to remember the founding of the “New Nemaska,” on the shores of Lake Champion in the heart of the boreal forest, some 1,500 kilometres from Montreal. Nemaska Chief Clarence Jolly said the community invited Legault to a traditional feast on Sunday, and planned to present him with Wapachee’s book and tell him their stories.

Thomas Jolly, a former chief, said he was 15 years old when he was forced to leave his village with all his belongings in a single bag.

Meeting Legault was important “because have to recognize what happened and we have to talk about the repercussions that the relocation had on people,” he said, adding that those effects are still felt today.

Earlier Sunday, Legault had been in the Cree community of Eastmain, where he participated in the official renaming of a hydro dam in honour of former premier Bernard Landry.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.



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B.C. mayors seek ‘immediate action’ from federal government on mental health crisis

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VANCOUVER – Mayors and other leaders from several British Columbia communities say the provincial and federal governments need to take “immediate action” to tackle mental health and public safety issues that have reached crisis levels.

Vancouver Mayor Ken Sim says it’s become “abundantly clear” that mental health and addiction issues and public safety have caused crises that are “gripping” Vancouver, and he and other politicians, First Nations leaders and law enforcement officials are pleading for federal and provincial help.

In a letter to Prime Minister Justin Trudeau and Premier David Eby, mayors say there are “three critical fronts” that require action including “mandatory care” for people with severe mental health and addiction issues.

The letter says senior governments also need to bring in “meaningful bail reform” for repeat offenders, and the federal government must improve policing at Metro Vancouver ports to stop illicit drugs from coming in and stolen vehicles from being exported.

Sim says the “current system” has failed British Columbians, and the number of people dealing with severe mental health and addiction issues due to lack of proper care has “reached a critical point.”

Vancouver Police Chief Adam Palmer says repeat violent offenders are too often released on bail due to a “revolving door of justice,” and a new approach is needed to deal with mentally ill people who “pose a serious and immediate danger to themselves and others.”

This report by The Canadian Press was first published Sept. 16, 2024

The Canadian Press. All rights reserved.



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Manitoba NDP removes backbencher from caucus over Nygard link

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WINNIPEG – A backbencher with Manitoba’s NDP government has been removed from caucus over his link to convicted sex offender Peter Nygard.

Caucus chair Mike Moyes says it learned early Monday that a business partner of Mark Wasyliw is acting as Nygard’s criminal defence lawyer.

Moyes says Wasyliw was notified of the decision.

“Wasyliw’s failure to demonstrate good judgment does not align with our caucus principles of mutual respect and trust,” Moyes said in a statement.

“As such MLA Wasyliw can no longer continue his role in our caucus.”

Nygard, who founded a fashion empire in Winnipeg, was sentenced earlier this month to 11 years in prison for sexually assaulting four women at his company’s headquarters in Toronto.

The 83-year-old continues to face charges in Manitoba, Quebec and the United States.

Moyes declined to say whether Wasyliw would be sitting as an Independent.

The legislature member for Fort Garry was first elected in 2019. Before the NDP formed government in 2023, Wasyliw served as the party’s finance critic.

He previously came under fire from the Opposition Progressive Conservatives for continuing to work as a lawyer while serving in the legislature.

At the time, Wasyliw told the Winnipeg Free Press that he was disappointed he wasn’t named to cabinet and planned to continue working as a defence lawyer.

Premier Wab Kinew objected to Wasyliw’s decision, saying elected officials should focus on serving the public.

There were possible signs of tension between Wasyliw and Kinew last fall. Wasyliw didn’t shake hands with the new premier after being sworn into office. Other caucus members shook Kinew’s hand, hugged or offered a fist bump.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.



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