On Thursday morning, April 17th, Aron Gampel, Vice President and Deputy Chief Economist for Scotiabank, addressed members and guests of the Stoney Creek Chamber of Commerce at Chandelier Place in Stoney Creek.
Mr Gampel was speaking on the general state of the economy and said the US economy is contracting and going through a particularly difficult time. Due to the fact the Canadian and US economies are tied together in the manufacturing sector, the US downturn is having a negative effect on Ontario. Overall Canadians are relatively confident and the Canadian economy as a whole is continuing to grow, and attract new jobs, but at a slower rate than some of the developing counties in the world. For example, in the first three months of the year there was a net increase of 126,000 new jobs in Canada, compared to a net loss of 300,000 jobs in the US.
The resource sector is energizing the Canadian economy bringing with it a strong dollar and low inflation.. The western and eastern provinces are enjoying boom economies with Ontario, and to a somewhat lesser extent Quebec, suffering as the strong dollar pushes manufacturing jobs off shore to developing countries. The traditional economies of the west are also being affected by globalization and the demand for resources and products in the high growth economies of China, India, Mexico, and Brazil.
Mr Gampel believes Canada will continue to outperform the US going forward but that we will continue to be adversely affected by the downturn in the US and we will have to lower our expectations. The energy sector is supporting our economy at the time being where GDP growth over the past several years has been about 3%. Over the next several years GDP growth is expected to be lowered to the area of about 1.5%. It will take about two to three years for the US to start to turn their economy around and we will see uneven growth over this same period. The Canadian dollar is expected to remain strong this year in the 98 cents to $1.03 range according to Mr Gampel.