(December 6) – “Gordon Thiessen attempted to quell fears that Canada’s booming economy could trigger inflation yesterday during a speech in Vancouver where he suggested it would be a mistake to read too much into the country’s rosy jobless rate,” the Globe and Mail is reporting.
“At a speech to the right-wing Fraser Institute, the Bank of Canada Governor commented on the 6.9-per-cent national jobless rate for November — an 18-year low — reported by Statistics Canada at the end of last week.
“‘I think the unemployment numbers that we got last are certainly to be welcomed. [But] there was no labour force growth last month and there hasn’t really been all that much in the recent period.’
“He said he expected inflation to be in the 2-per-cent range, “but there are risks dependent on the U.S. and world economy, and on domestic spending.”
“He said the Bank of Canada must be vigilant about the spillover of the robust American economy — the strongest in the world right now — into Canada.
“His remarks came on the same day Statscan released more good news about the country’s economy, including a big rise in October construction activity and a 7.6-per-cent spike up in corporate profits for the third quarter.
“While more Canadians are finding work, there is a growing public policy debate on the flow of Canada’s best and brightest to the United States, where taxes are lower and the potential for riches often higher. Mr. Thiessen acknowledged the problem, saying ‘there is no question tax differentials [between Canada and the United States] do make a difference. The highest marginal tax rate cuts in earlier in Canada than the U.S. and that does make a difference.’
“In Canada, the income level is $60,000 or more; in the United States the top rate often doesn’t kick in until income reaches $120,000 (U.S.) or more.
“Mr. Thiessen said that as the economy recovers, and commodity prices continue to pick up, there should be some improvement in the value of the Canadian dollar against other currencies.
“And he said economic growth, which came in at a solid 4.75 per cent in the third quarter, a rate that fuelled the job market and brought about the bullish unemployment figures, is likely to continue at a solid pace in the fourth quarter and into next year.
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