Canada ‘enthusiastic rebound’ best in G7, OECD says
A global economic forecasting group says Canadian economic growth will outpace that of other G7 nations by a wide margin during the first half of 2010.
The Paris-based Organization for Economic Development and Co-operation is forecasting that Canada’s economy grew 6.2 per cent in the first quarter, well ahead of the 1.9 per cent overall growth for the G7 nations.
The OECD predicts that Canada’s second-quarter growth will be about 4.5 per cent, nearly double the 2.3 per cent growth expected from the combined G7.
The latest outlook comes as Canadian economic data shows the country embarked upon an enthusiastic rebound at the start of the year.
In January, Canada’s gross domestic product advanced 0.6 per cent, driven by growth in activity in factories, at construction sites, in mines and in the oilpatch.
However, economists have cautioned that Canada’s economic growth will likely slow down as the Bank of Canada is expected to raise interest rates this July, while consumers could decrease spending to pay off their debts.
In the OECD study, the organization said that growth in leading rich economies will slow in the first half of this year, with the United States and Japan outpacing sluggish Europe.
The OECD links the slowdown to the end of some government stimulus programs and the emptying of inventory stocks all while the recovery and labour markets remain frail after the worst global recession in decades.
Most of the global economic growth this year is expected in countries not addressed in the report, such as China, India and Brazil.
Still, “overall it is an encouraging picture,” OECD chief economist Pier Carlo Padoan told a news conference about the agency’s report on the Group of Seven industrial economies. “It is stronger in the United States and Japan, it is not as strong in Europe.”
The OECD forecast that U.S. gross domestic product would rise 2.4 per cent in the first quarter and 2.3 per cent in the second quarter, down from 5.6 per cent in the fourth quarter of last year. Forecasts for Japan are 1.1 per cent and 2.3 per cent for the first two quarters of 2010, down from 3.8 per cent in the fourth quarter 2009.
Forecasts for Germany fell, however, blamed on a slump in construction activity.
The OECD urged rich governments to end stimulus programs next year or earlier to avoid sinking deeper into debt. But it warned that they should do so gradually and carefully.
“Despite some encouraging signs on activity, the fragility of the recovery, a frail labour market and possible headwinds coming from financial markets underscore the need for caution in the removal of policy support,” the report said. “Consolidation should start in 2011, or earlier where needed, and progress gradually so as not to undermine the incipient recovery.”
Dollar continues to hover near par
The Canadian dollar continued to straddle parity with the U.S. currency Wednesday.
Shortly after 10 am E.T., the loonie was trading at 99.97 cents U.S., up .09 of a cent from Tuesday’s close.
It rose as high as 100.03 cents US earlier Wednesday, a day after it moved above parity with the greenback for the first time since July 2008.
The dollar’s move up came the same day a global forecasting group called for Canada’s economy to grow more than others in the G7 over the first six months of this year.
The Paris-based Organization for Economic Development and Co-operation is forecasting that Canada’s economy grew 6.2 per cent in the first quarter, well ahead of the 1.9 per cent overall growth for the G7 nations.
It predicted second-quarter growth will be about 4.5 per cent, nearly double the 2.3 per cent growth expected by the combined G7.
The organization says that growth in leading rich economies will slow in the first half of this year, with the United States and Japan outpacing sluggish Europe.
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Canada Targets Asylum Laws
Canada’s immigration minister proposed sweeping changes to the country’s asylum legislation on Tuesday, aiming to help clear a multiyear backlog in processing refugee applications and stem a recent inrush of claimants.
The overhaul would address an asylum system considered one of the fairest and most generous in the world—but that is now clogged by cases after a 68% rise in applications since 2005. Jason Kenney, minister of citizenship, immigration and multiculturalism, blames this on a slow, convoluted approval system he says has been exploited by claimants who are after economic opportunities and benefits, not protection from persecution.
The changes would speed hearings, streamline appeals and accelerate deportations when applications are denied. They are “essential to fix serious problems in Canada’s asylum system,” Mr. Kenney said, adding that he hopes the amendments will pass in Parliament in time for implementation next year.
No opposition parties have said they’ll vote against the amendments yet, and one has signaled cautious support.
Critics warn the plan could erode Canada’s position as a haven by removing safeguards that give anyone a fair chance to show they need protection. Refugee-advocacy groups and opposition-party legislators are wary of a proposal to deny appeals to applicants who come from countries to which Canada deems they can be safely returned.
“To set up two classes of refugee claimants is not right,” said Olivia Chow, the lawmaker from the left-leaning New Democratic Party who handles immigration issues. “Every single individual should have equal rights.”
Under Canada’s current system, applicants apply under the standard United Nations definition of a refugee, meaning they fear some sort of persecution at home. In Canada, each is granted a full hearing by a judicial body, a process that has won praise from the United Nations’ refugee agency, said Peter Showler, a professor of refugee law at the University of Ottawa law school and former chair of the Immigration and Refugee Board of Canada, the government agency that reviews asylum applications.
In recent years, that ease of application combined with the lengthy review process has meant a greater caseload than the system can handle. Mr. Kenney says it has also encouraged more applications from people who don’t need protection but hope to figure out a way to stay during the years it takes to process their cases.
Canada had a backlog of 61,000 refugee applications at the end of December. On average, claimants must now wait 19 months for a first hearing; applicants who are denied can stay for as long as 10 years until they have exhausted all avenues of appeal and are deported, Mr. Kenney said. Nearly 60% of applications are eventually denied.
The proposed asylum-system overhaul will cost an estimated 540 million Canadian dollar (US$530 million); it would require initial hearings on applications within 60 days, conducted by civil servants rather than political appointees as is done now. It would also increase resources for security screenings, a step the U.S. has long requested, said Mr. Kenney.
Rejected applicants can appeal the decision unless they are from countries listed as “safe”—generally democracies with “robust” human-rights records, which don’t normally produce refugees, Mr. Kenney said. The removal of that appeals process will allow Canada to deport rejected applicants from these countries much faster than it does now, he said.
“It’s a tool that’s used not to restrict [applicants’] access to a hearing but to accelerate removal after they’re denied,” said Mr. Kenney.
Mr. Kenney noted that many European countries, including France, Germany and the U.K., already use such lists. Canada will craft its own list in consultation with the United Nations High Commissioner on Refugees, and will consider only countries that fit the qualifications, and are “major sources of unfounded asylum claims,” he said.
A case in point is Hungary, the source of 2,440 asylum applications to Canada last year, second only to Mexico. Only 267 cases from Hungary were closed in 2009. Of those, the vast majority–97%—withdrew their applications on their own. Of the cases actually heard, three people were admitted and five rejected.
Some asylum applicants subsequently said they were coached to file false claims in order to receive welfare and social benefits, Mr. Kenney said.
Refugee advocates warn it’s not easy to determine which countries are safe and which aren’t. Some governments may ignore violence against ethnic populations or be too corrupt to enforce laws that officially protect their citizenry. Others don’t offer adequate protection to women who are victims of domestic violence, or gays and lesbians who face persecution at home, said Janet Dench, executive director of the Canadian Council for Refugees.
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Visible minority population on the rise
A new report from Statistics Canada indicates that Canada’s visible minority population will soon be the majority in some cities.
The report shows that in 20 years, about 30% of Canadians will be visible minorities and in Toronto and Vancouver, about two thirds of the population will be non-white.
StatsCan says Calgary’s visible minority population is expected to be 38 % in 20 years from now.
U of C Demographer, Kevin McQuillan says a vast majority of the visible minority population has decided to live in Canada’s big cities.
“That’s where most of the economic opportunity is, so people thinking in terms of coming to the country and finding jobs, it’s not like a century ago when you thought of buying farmland and starting up in farming, I think people are now looking to the cities for jobs,” said McQuillan
According to the report, StatsCan expects the following trends in the growth of Canada’s visible minority population by 2031:
- The South Asian population — which includes people from India, Pakistan and Sri Lanka will grow to between 3.2 and 4.1 million, up from 1.6 million in 2006
- The Chinese population is expected to grow to between 2.4 million and 3.0 million, up from 1.3 million
- The West Asian population will likely number some 457,000 to 592,000 people, up from 164,000 in 2006
- The Arab population will triple, or even quadruple, to between 806,000 and 1.1 million, up from 276,000 in 2006
- The Black population is likely to double, growing to between 1.6 million and 2.0 million, up from 815,000 in 2006
- The Filipino population is also likely to double, growing to between 908,000 and 1.1 million, up from 427,000 in 2006
South Asians are currently the largest visible minority group in Canada and that will still be the case twenty years from now.
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