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OTTAWA – Canada’s economy is still mired in recession and a long way from recovery, despite months of “green shoot” speculation, says a report released today by the Canadian Centre for Policy Alternatives (CCPA).
Canada’s Long Road to Economic Recovery, by Jim Stanford and David Macdonald, examines Canada’s economic indicators and concludes more public investment will be key to Canada’s recovery.
“Canada’s private sector has not yet bounced back from last year’s economic shock and there are no signs that it will rebound quickly,” says Stanford, CCPA research associate and economist with the Canadian Auto Workers. “Public investment has been essential to stabilizing Canada’s economy—it is the only engine of economic growth right now.”
The report looks at Ottawa’s stimulus initiatives to date and finds:
- the Harper government handed Canada’s financial sector one of the biggest support packages in history, freeing up banks for continued healthy profits while private sector borrowing remains in decline;
- the federal government’s 2009-10 stimulus package of $18 billion pales in comparison to a potential $200 billion in financial sector bailout;
- net federal infrastructure stimulus spending during the period from October 2008 to August 2009 declined by $1.7 billion compared to the same period the previous year;
- federal stimulus spending on infrastructure projects most likely to create new jobs from April to August 2009 went up by only $1.9 billion compared to a year ago—only 22% of such promised budget increases had been spent by August, meaning most of the infrastructure money missed the 2009 summer building season;
- Canadian program spending expansion was outpaced 7 to 1 by the Americans in the first half of 2009.
“The federal government was quick to support Canada’s financial sector but its job creating infrastructure stimulus program hasn’t been up to the task,” says David Macdonald, coordinator of the CCPA’s Alternative Federal Budget.
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