Tilson not surprised at predictions we will avoid recession
By Bill Rea

Despite what some economists and media observers might say, Canada is not heading into a recession.

That was the conclusion announced last week by Bank of Canada Governor Mark Carney, and it came as no surprise to Dufferin - Caledon MP David Tilson.

But Kelly Darnley, executive director of the Caledon Chamber of Commerce, wasn't quite as convinced.

Tilson said the media and some economists have been reacting to the fluctuating prices of oil, and jumped to the conclusion a recession is coming.

"That's not what the finance minister of Canada has said," he observed.

"The finance minister of Canada has said that Canada's economic fundamentals are solid."

He added that ties in with the comments Carney made.

In delivering his latest report on the health of the economy, Carney was reported as saying Canada is still looking at challenges in three areas.

Namely the slowing American economy, rising energy costs and uncertainty in global financial markets.

But he also predicted the Canadian economy will continue to rise in the months to come.

"The deterioration in economic and financial conditions in the United States will have direct consequences for the Canadian economy," he said.

First, exports are projected to decline, exerting a significant drag on growth in 2008. Second, turbulence in global financial markets will continue to affect the cost and availability of credit. Third, business and consumer sentiment in Canada is expected to soften somewhat. Nevertheless, domestic demand is projected to remain strong, supported by firm commodity prices, high employment levels, and the effect of cumulative easing in monetary policy."

Tilson also observed he was in Europe a couple of weeks ago, and learned a lot of his counterparts there are envious of the way the Canadian economy has been working.

"They all hold Canada up as one of the strongest economies in the world," he declared.

"We have the lowest debt burden in the G-7," he added, also commenting that Canada's housing market and public pensions are solid and sustainable.

The economists who have been predicting a recession, he said, "are probably a little bit alarmist and I don't agree with them."

But Darnley was of a different view.

"That would be good news," she commented. "However, there is evidence in the commercial district and the manufacturing district in Caledon that right now is not reflective of that."

She pointed out there have been businesses closing, as well as layoffs. "That would be contrary to great economic times," she observed.

But Darnley stressed she didn't think all the news was bad.

"Lots can change," she observed, pointing out the price of gas has been coming down lately. If government can stay on the right course, she said the worst could be avoided.

On the other hand, uncertainty in the United States is making it hard to predict Canada's economic future.

"The economy in the States has not yet bottomed out," she remarked.