Canada's Growth Prospects Brightened by Exports to US
Fred Langan, Monitor, The Christian Science Monitor
EXPORTS continue to drive Canada's economy, gaining steam from treaties reducing tariffs with the United States and Mexico.
With exports to the US surging, Canada's overall economic growth is expected to be steady at about 2 percent in 1996. But unemployment is stuck just under 10 percent - almost double the US rate - and the cloud of the separatist movement in Quebec continues to worry investors.
Economists expect the growth in the Canadian economy to continue to come from trade, especially with the US. And they hope that will translate into jobs. "Almost 130,000 new positions were added to this country's payrolls from December through March," says Aron Gampel, an economist at the Bank of Nova Scotia in Toronto. Among the Group of Seven industrialized nations, "Canada is now the ... leader in exports. Nearly half of private sector output is sent to foreign destinations," he says. "Canada's balance of trade set a record in 1995," adds Denis Boudreau of Statistics Canada's Montreal office. The overall trade surplus was $28 billion (Canadian; US$20.6 billion). Natural resources, from newsprint to potash, have seen prices rise, and that too has helped Canada's balance of trade. But numbers from Statistics Canada, the federal data collector, show the country is exporting more than just raw materials. "The biggest push came from office machines, bolstered by shipments of computer-related equipment to the United States," the agency said of December 1995 trade figures. Figures show that since January of 1993, Canada's exports of office equipment have doubled. Total exports to the US were $202 billion (US$149 billion) last year, up 13.4 percent on the previous year. That left Canada with a balance of trade of $33 billion in its dealings with the US, by far its largest trading partner. Canada also saw a 22 percent growth in trade with Japan; its trade surplus with the Japanese tripled to $3 billion. Canada had a slight deficit with the European Union and other industrialized countries. Economist Mr. Gampel says he is "upbeat" about the Canadian economy in 1996. One reason is the paydown of Canadian government debt. "The federal government should start paying down debt for the first time in over a quarter century," he says. …