OECD Hails Canada’s Economic Rebound
The Paris-based Organisation for Economic Co-operation and Development (OECD) noted in a recent study that Canada’s economy is eclipsing those of other G7 nations in terms of the speed and strength of its recovery. Observing that Canada’s economy likely grew 6.2 percent in the first quarter of this year (overall growth for Canada’s G7 peers is estimated at 1.9 percent), OECD said that Canada’s economy should continue to grow during the second quarter, this time at about 4.5 percent, or approximately twice that of the G7 average.
“Canada is benefiting from its past good policies,” said Pier Carlo Padoan, OECD’s Chief Economist, who noted that Canada’s strong fundamentals coming into the recession has helped it rebound. In addition, Canada’s debt relative to its economy is the lowest in the G7. Although many economists have forecast strong Canadian growth for the first half of this year, few have put growth above 6 percent for any quarter.
As for the global picture, the 30-member OECD is moderately optimistic, citing the strong growth of emerging economies. “The bottom line is that the recovery is taking hold slowly,” Mr. Padoan said at a news conference. “Industry production is bouncing back strongly, business confidence is rebounding…that is extremely encouraging.”
The same OECD study that hailed Canada’s economic rebound out of the global recession predicts a growth slow-down in leading rich nations’ economies, once government stimulus programs are withdrawn.
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Bank of Canada Governor Mark Carney.
G20 Framework Would Deliver Substantial Gains, Bank of Canada Governor Mark Carney Says
In a recent speech to the Ottawa Economics Association, Bank of Canada Governor Mark Carney cited research illustrating that substantial gains await the international community with the implementation of the G20 framework launched last November in St. Andrews, Scotland. He also warned of considerable costs should the framework be disregarded. Ultimately, securing strong, sustainable, and balanced global economic growth will require changes in behavior as well as policy adjustments on several fronts, Governor Carney said.
The Governor advised that now is not the time for Canada to rest on its laurels or to take an open global economy for granted. “The twin challenges of boosting Canadian productivity and of implementing the G20 framework globally are daunting,” he acknowledged. “But the gains are considerable.”
Governor Carney stressed that the Bank of Canada is committed to tackling these important issues. “We have a broad research agenda on productivity. We are working with our domestic and international partners to reform the global financial system. We are active participants in G20 framework discussions, not merely because they offer the best outcome for the global economy but also because they are in Canada’s interests,” he said.
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Minister of Finance Jim Flaherty spoke at the launch in Washington, on Thursday, April 22, 2010, of the Global Agriculture and Food Security Program, an event hosted by US Secretary of the Treasury Tim Geithner and attended by Bill Gates, Founder of the Bill & Melinda Gates Foundation.
Canada Helps Launch Global Agriculture and Food Security Program
Jim Flaherty, Minister of Finance, announced last month that Canada would participate in a new World Bank initiative to improve agriculture and food security assistance to low-income countries. The Minister, who announced Canada’s participation on behalf of Minister of International Cooperation Beverley J. Oda, spoke at the launch of the Global Agriculture and Food Security Program (GAFSP), an event hosted by US Secretary of the Treasury Tim Geithner and attended by Bill Gates, Founder of the Bill & Melinda Gates Foundation.
“Today, it is estimated that more than a billion people go to bed hungry,” said Minister Flaherty. “This new Global Agriculture and Food Security Program can help change that, and I am pleased that Canada is among the first to contribute. I am particularly encouraged that there is a role for the private sector to boost the resources available to combat hunger, and that countries in need will play a leading role in putting these new funds to their best use.”
The GAFSP was established by the World Bank in response to calls made at the G8 L’Aquila and the G20 Pittsburgh summits for a multilateral trust fund to boost sustainable agriculture and food security assistance to low-income countries. The GAFSP is an improvement over current initiatives as it is designed to strengthen links to the private sector, provide additional and rapidly available resources for sustainable agriculture development, and ensure country ownership by linking funding to developing countries’ identified priorities and strategies.
Canada is providing $230 million to the GAFSP as part of a three-year, $600-million agriculture package, a doubling of Canada’s existing spending in this area. It is a further demonstration of Canada’s leadership in global food security, where Canada is the third-largest contributor to the World Food Programme, and has fully untied its food aid.
Minister Flaherty noted that the Canadian contribution is another example of Canada’s commitment to international financial institutions such as the World Bank and International Monetary Fund (IMF). Over the past year, Canada has boosted its contributions to these multilateral institutions by more than $22 billion. This includes being the first donor nation to the World Bank’s Global Trade Liquidity Program (see sidebar), and the first G20 nation to provide an increased commitment to the IMF’s Poverty Reduction and Growth Trust, to support low-income countries facing severe economic challenges.
“Canada is delivering on its food security and sustainable agricultural development commitments made last year at the G8 L’Aquila Summit,” said Minister Oda. “Lack of access to safe and nutritious food is one of the major obstacles to reducing poverty in developing countries.”
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Angel Gurría, OECD Secretary-General.
Good Secondary-Schooling Plays Major Role in Future GDP Growth, OECD Study Shows
Canada’s top-performing high school students are 20 times more likely to access a university education than those at the bottom, and they are also more likely to choose pure science topics, according to a new Organisation for Economic Co-operation and Development (OECD) publication, Pathways to Success.
Drawing on results from the Program for International Student Assessment (PISA), an OECD-led evaluation of the knowledge and skills of 15-year-olds from around the world, and the Canadian Youth in Transition Survey (YITS), a follow-up to PISA tests held in 2000, the study shows that while pathways taken by students from high school to university or a successful job entry may vary, they closely depend on learning outcomes in school.
The OECD-Canada collaborative study, Pathways to Success.
The YITS survey is a longitudinal study tracking 30,000 Canadian students who took part in the PISA 2000 assessment and, with interviews every two years, follows their progress from secondary school into higher education and the labor market.
The results of this PISA/YITS collaboration also show that students who score lowest in PISA are often those who take longest to complete secondary education and who move directly from school to work. Improving the performance of these students would lead to higher rates of completion of secondary education and post-secondary education pursuits.
In the case of Canada, raising average PISA scores by 25 points over the next 20 years – an increase smaller than that achieved by Poland between 2000 and 2006 – would lead to increases in GDP by 2090 of more than 3 trillion in today’s Canadian dollars, or the equivalent of twice Canada’s current annual GDP. For all OECD countries taken together, the increase would be even bigger, equivalent to around three times their combined current GDP.
“These numbers highlight the enormous impact that improved schooling outcomes have on our long-term economic and social well-being,” OECD Secretary-General Angel Gurría said. “They also show that these improvements can be achieved and that the cost of inaction far outstrips any conceivable cost of improvement.”
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One of 16 Bombardier CRJ 705 aircraft that are part of the overall Jazz Air fleet.
Jazz Air Signs $100-Million Deal with Thomas Cook
Canada’s Jazz Air, which operates flights on behalf of Air Canada, announced last month that it has signed a flight services agreement with leading leisure travel company Thomas Cook Canada Inc. (“Thomas Cook”) to operate no less than six Boeing 757-200 aircraft on the company’s behalf to various sun destinations from Canadian gateways during the winter travel season of November through April. Subject to Jazz obtaining the required regulatory approvals and the execution of definitive leasing and maintenance agreements with Thomas Cook Airlines Ltd., the service will commence in November 2010.
The agreement, expected to generate approximately $100 million in additional annual revenues for the airline, reflects Jazz’s stated priority of growing and diversifying its business and represents a “strong start that delivers value to all our stakeholders,” according to Joseph Randell, the airline’s President and Chief Executive Officer. He added: “We are thrilled to be partnering with one of the world’s largest leisure travel groups.”
“We see a great fit between Thomas Cook and Jazz,” said Michael Friisdahl, President and Chief Executive Officer for Thomas Cook North America. “We’re pleased to partner with an airline that prides itself on exceptional customer service and boasts amongst the strongest on-time performance in North America.”
About Jazz Air
Jazz Air has a strong history in Canadian aviation with its roots going back to the 1930s. Since becoming publicly traded in February 2006, it has generated some of the strongest operational and financial results in the North American aviation industry. Under a capacity purchase agreement with Air Canada, Jazz provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States. Jazz currently operates scheduled passenger service on behalf of Air Canada with approximately 800 departures per weekday to over 80 destinations in Canada and in the United States with a fleet of Canadian-made Bombardier aircraft. |
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Minister of Finance Jim Flaherty had a bilateral meeting with his Chinese counterpart Xie Xuren following the G20 Finance Ministers and Central Bank Governors meeting in Washington, on Friday, April 23, 2010.
Minister of Finance Welcomes Designation of Canada as Qualified Destination for Chinese Investment
Minister of Finance Jim Flaherty last month welcomed an agreement with the China Banking Regulatory Commission that designates Canada as a destination for Chinese investment under China’s Qualified Domestic Institutional Investor (QDII) program.
“This agreement will give Canadian financial markets access to up to $8 billion in investment capital,” said Minister Flaherty, who made the designation a key objective of his trip to China in August 2009. “This represents a strong vote of confidence in Canada’s economic prospects and the soundness of Canada’s financial system.”
Minister of Finance Jim Flaherty (front, center) was the host of the G7 reception/dinner at the Canadian Embassy in Washington, on Thursday, April 22, 2010.
The QDII program allows approved institutional investors in China, including banks, fund management companies, and insurance firms, to invest funds pooled from their mainland clients in approved overseas financial markets.
China’s three financial sector regulatory commissions – for banking, insurance, and securities – share responsibility for the program. To date, the banking and securities commissions have concluded an exchange of letters with the provincial securities commissions, allowing Canada to be designated as a destination for mainland China investment.
Canada is working with the China Insurance Regulatory Commission to conclude an agreement to facilitate Chinese insurance companies’ wealth management investments in Canada.
“This is a timely agreement, coming as our fellow G20 partners discuss the need to maintain open capital markets,” said Minister Flaherty. “It also reinforces…the value in personally visiting our trading partners to discuss issues of mutual importance. I hope to return to China in the near future to continue the valuable dialogue we have established.”
The agreement was announced in the midst of a busy four-day visit by Minister Flaherty to Washington, DC. In addition to meetings of G7/G20 Finance Ministers and Central Bank Governors, the International Monetary and Financial Committee, and the Development Committee (a forum of the World Bank and the International Monetary Fund that facilitates intergovernmental consensus-building on development issues), Minister Flaherty announced Canada’s contribution to the Global Agriculture and Food Security Program (see story beginning “Canada Helps Launch…” below), attended the Bertelsmann Foundation Conference, and hosted a G7 Finance Ministers reception and dinner at the Canadian Embassy.
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Minister of Finance Jim Flaherty released a Code of Conduct for the Credit and Debit Card Industry in Canada at the Toronto Eaton Centre, on Friday, April 16, 2010.
Government of Canada Releases Code of Conduct for Credit and Debit Card Industry
Minister of Finance Jim Flaherty last month released a Code of Conduct for the Credit and Debit Card Industry in Canada, which promotes fair business practices and ensures that merchants and consumers understand the costs and benefits associated with credit and debit cards.
“Businesses have voiced real concerns about the lack of choice they have had in accepting debit and credit card payments, and about the costs involved,” said Minister Flaherty. “These added business costs are borne by merchants and may be passed on to consumers, which makes this an issue of importance to all Canadians. The Code of Conduct encourages choice and competition. It gives merchants the freedom to choose which card networks they use, helps them control their costs, and allows them to pass on savings to their customers.”
Under the Code, merchants will be
* Provided with clear information regarding fees and rates;
* Given advance notice of any new fees and fee increases;
* Able to cancel contracts without penalty should fees rise or new fees be introduced;
* Given new tools to promote competition, and, in particular, will have the freedom to accept credit payments from a particular network without the obligation to accept debit payments and vice versa.
The Code of Conduct is the result of extensive consultations with merchant and consumer associations, debit and credit card networks, payment processors, and credit card issuers across Canada. Industry will have until May 17th to review and adopt the Code of Conduct.
“Payment card networks, credit and debit card issuers, and payment processors are now being invited to adopt this Code,” said Minister Flaherty. “We are confident that they will do so voluntarily. Our Government has, however, taken steps in Budget 2010 to ensure that we have the legislative authority to regulate the industry if necessary.”
To that end, on March 29, the Government introduced legislation in Parliament to implement certain provisions of the Budget. The legislation enacts the Payment Card Networks Act, which would give the Minister of Finance the power to regulate the market conduct of the credit and debit card networks and their participants, if necessary.
Legislation tabled would also expand the mandate of the Financial Consumer Agency of Canada to supervise payment card network operators to monitor their compliance with the Code of Conduct and with any regulations introduced under the new Act.
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A United States Geological Survey map indicates the areas most affected by the devastating January 2010 earthquake in Haiti. Red denotes the areas of largest instrumental intensity.
Canada Helps Haiti Eliminate All Debt Owed to World Bank
Minister of Finance Jim Flaherty recently hailed the cancellation of nearly $40 million in debt owed by Haiti to the World Bank, a move that was made possible by financial commitments by Canada and other donor nations.
“At our recent meeting in Iqaluit, G7 Finance Ministers pledged to work with the World Bank and other international financial institutions to forgive lingering debts that would divert valuable resources from Haiti’s long-term development needs,” said Minister Flaherty.
“Canada is pleased to provide the largest financial commitment to today’s effort, and will now work with remaining multilateral organizations to direct past financial obligations towards a much more meaningful purpose – the future of Haiti’s citizens.”
As part of today’s announcement by the World Bank, Canada will provide close to $8 million to cover the cost of Haiti’s debt to the Bank’s International Development Association, using Canadian resources currently held in the World Bank’s Debt Relief Trust Fund.
The debt relief is part of the $400 million which Canada is providing for humanitarian and reconstruction programs in Haiti following the country’s devastating earthquake in January. Minister of International Cooperation Beverley J. Oda announced the overall aid package on March 31 at the United Nations’ International Donors’ Conference in New York.
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Dan Sullivan, Consul General of Canada in New York.
Canada Day in Trenton Advances Canada’s Economic Relationship with New Jersey
On March 18, a Consulate General of Canada team, headed by Consul General Dan Sullivan, organized a Canada Day in Trenton advocacy event in Trenton, New Jersey. During the day, the Consul General held multiple meetings with state legislative leaders and media and hosted an evening reception for approximately 50 representatives from state and local government, business, media, and academia.
During his address to reception attendees, CG Sullivan hailed the thriving economic relationship between Canada and New Jersey – Canada is the number-one export market for New Jersey goods – and noted that Canada and New Jersey conduct over $15 billion in bi-lateral trade every year. In addition, the Consul General said, there are “over 100 Canadian companies that operate in the state of New Jersey, that employ tens of thousands of people. Trade with Canada, we estimate, supports over 200,000 [New Jersey] jobs.”
Mr. Sullivan also expressed his delight at the announcement in February that Canada had reached a deal exempting it from the “Buy American” provisions included in 2009’s American Recovery and Reinvestment Act (more commonly referred to as the Stimulus Bill). “It’s particularly important during these challenging economic times to recognize that the free trade relationship that exists between the two countries has to certainly be continued and expanded,” CG Sullivan said, “because it provides the stability that’s necessary for economic recovery and future growth.” He added that the resolution of the “Buy American” issue between Canada and the US is “a win for Canada, and it’s a win for the United States.”
Ultimately, CG Sullivan placed the Canada-New Jersey relationship into the larger context of the Canada-US relationship, which he characterized as one of the most successful international partnerships in the world while noting the two countries’ ongoing collaboration on border security and, in a related issue, Canada’s importance to the US and New Jersey as a stable, trusted supplier of energy. “Canada is the largest supplier of energy to the US, and it’s also the largest supplier of energy to New Jersey,” he said.
The Consulate’s Canada Day in Trenton initiative was covered extensively in the Market Watch business section of The Times of Trenton and in NJBIZ (a weekly state-wide newspaper focused on business issues). In the latter publication, which called Canada “a vital lifeline in meeting [New Jersey’s] energy needs,” the Consul General sat down for an interview with Andrew Kitchenman, the paper’s Statehouse correspondent. During the interview, CG Sullivan outlined the potential benefits to New Jersey businesses looking to establish operations or otherwise invest in Canada and offered the assistance of the Consulate General of Canada in New York’s International Business Development section and Princeton office.
Ultimately, in the words of The Times of Trenton, the message of the day for New Jersey was to “think north when it comes to economic development.”
For a complimentary copy of a special brochure outlining the Canada-New Jersey partnership, please email Canada.Watch@international.gc.ca, and provide your mailing address.
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