A lot of closed stores across Canada including Toronto’s busiest commercial streets give a depressive look, and the members of permanently laid off work force seem to have exhausted their EI benefits. Neither are there any replacement jobs in sight nor is any glimmer of hope for an easy reversal of the ongoing embarrassment.
Thus, another economic slowdown as predicted is quite worrisome. Modest gains, if any, would be noticeable, yet too insufficient to make a quicker come back of a promising financial strength to the general public.
Apart from speculations, an open market economy goes through fluctuations and adjustments. Nevertheless, the Canadian economy has proven stronger than many other global economies throughout the last couple of years despite the recessionary pressure, yet we are so strongly tied with the economies of our trading partners that we have to be affected naturally as a result.
A lot of dollars have been flowing into our economy for the last two or so years.
It has to be admitted that our regulation of financial institutions despite its flaws is still better than many others because of its help to protect us through tough time. However, the increased value of our dollar makes it much harder for the Canadian exporters to deal with other countries as well as it discourages foreign tourists to come here.
A drastic change in the demographics could be the main culprit. On the contrary, Canadian dollar value has nothing to do with exports as our manufacturing sector has almost been outsourced to foreign lands. But, it is true that there is a decline in the visitors to Canada of course. A shift in paradigm, demography and climate change has all contributed to turning everything upside down indeed.
To control inflation, the Bank of Canada has increased interest rates by 0.75 percent since June, after holding the overnight rate at the hyper-low 0.25 per cent level for over a year. Meanwhile, Finance Minister has vowed that “all government stimuli” introduced two years ago will be terminated in the spring of 2011. That means it is an intended slowdown ahead in deed.
Bank of Canada’s policy to increase rates again to further slow down our economy is beyond our comprehension. The question is - in case of any excuse to jack up prices - will there ever be a time for us to get out of debt? The answer is very simple as there isn’t even a remote possibility.
Despite some positive results in the stock market, economy may be slowing down due to mismanagement by the Harper government. In fact, our GDP figures and employment data showed no considerable progress. However, a few companies enjoyed an artificial growth due to their downsizing and the stimulus package. Since the things are in for a down-turn now, just wait until all of the fallout from the HST and higher Utility Rates hit those of us in Ontario, BC or elsewhere who are struggling subsequent to loss of their employment income, insufficient pension and lack of other facilities.
The worst case scenario, of course, is we as Canadians need to prepare for the future in view of the soon ending government stimulus. Harper's response to the current situation ending the economic stimulus is more painful, as the same money is going to be rechanneled to the purchase of fighter jets.
Had the conservatives spent $9 billion for job creation for Canadian work force instead of undertaking an extremely expensive deal of military fighter jets ($35 billion over five years), Canada would have been in a much better economic shape.
The reason for preferring Canadian Air Force over the Canadian Work Force is best known to the government. Furthermore, spending more than billion dollars on the G8 and G20 Summit could have also been utilized on job creation. What a neglect by the Conservatives of the working class?
According to TD bank and other reliable sources, there's probably more economic pain coming.
Will another federal election be called along with the coming pain? Let’s wait and see if there's little or no chance at all for Mr. Harper to get re-elected into the majority he desperately wants. However, that seems to be the only desire he has at the very moment.
On the other hand, our trade deficit has been mounting as we consume more imports than our exports.
This negative balance of trade is responsible for hammering and damaging Canadian economic power. Since, Canada is full of experts to neutralize bad news and invent good news instead, investors are so puzzled and are unable to guess. The jobless situation and a Real Estate market have almost peaked; hence expensive credit market could lead the economy going sideways. Such a scenario can also lead to a future market crash in both the TSX and the real estate market, resulting in a further increase in job losses.
Industrial technologies are surging at various levels to newer areas. They tend to drag along other areas like wages, banking issues and financing costs relocating from one geographic area to another based on general economic costs. Cheap costs and political considerations have seen a huge re-allocation of world resouces for instance from many western economies including Canada towards China, India or other destinations. Such an outsourcing is costing Canada a huge job loss due to an 'absent contingency plan' to deal with such a variable scenario.
Realizing the pattern and prediction of how any particular change may affect you - is one of the most important issues in maintaining long term stability in any particular place. We live in a world, where people want a better lifestyle. Those who have good standard of life - really don't want to lose it. Why should they? So we struggle to maintain what we have.
However, there exits a fear factor of losing, yet the main beneficiaries of the ongoing trend of shifting economic opportunities, outsourcing and other cost cutting measures - are the big corporations and businesses. They are out there to make money even if they have to create an artificial shortage of work for local workers.
As the economy is in a fragile mode due to an unusual uncertainty, Governments at federal and provincial levels should be more vigilant about economic woes in order to rescue the victims from its worst effects. Otherwise, our economy is poised for doom unfortunately. Nevertheless, the governing Conservatives, the Real Estate agents, the bankers and investors are somewhat in the denial mode about the state of the economy.
Since the Liberals are closely in touch with Canadians’ lives, all Canadians especially the poor class and the middle class will be more comfortable with the Liberal platform, as it focuses on health care, education, child care, retirement and pensions.
Nevertheless, under the circumstances, the important steps mentioned below are extremely essential to minimize the upcoming pain for the ease of the concerned Canadians:
a) Cutting government wasteful spending including government studies of projects only to find out that the study was a waste and the project contributed nothing.
b) Reducing personal income taxes, and eliminating any income tax for the unfortunate.
c) Correcting market inefficiencies in the housing sector because of restricted buying power.
d) Reducing property taxes
e) Giving incentives to manufacturers for bringing the industry back to Canada for sake of our own economic prosperity.
f) Leaving the interest rate with no more hikes.
Above measures are highly recommended to save the Canadians from suffering the most severe pain in the days ahead. Surely, if the system functions with enough resources and continues to add to the general wealth, national and regional areas would keep prospering. Hence, Canadian government should encourage high tech industries to offer multiple opportunities to local workers for increasing wealth in general.