From Friday's Globe and Mail
April 10, 2009 at 1:29 AM EDT
Recent figures on the Canadian economy show a more varied and complex picture than the one many people would fear. Not everything is going from bad to worse.
Though in December, for the first time since 1976, Canada recorded a trade deficit, which deepened in January, the downward trend was reversed in February, the latest month for which Statistics Canada has published the data on this country's international merchandise trade. A $1.2-billion deficit in January has become a small $126-million surplus in February.
It is good that both exports and imports are up, signs of demand for Canadian goods and of healthy demand from Canadian businesses and consumers. Across the world, there has been an unsettling tendency to deglobalization; symptoms to the contrary are welcome.
The makeup of the rise in exports is striking. Despite the troubles of the automobile industry, the production of auto makers was up in February. As a result, exports of automotive products rose 20 per cent in February, after reaching a low point in January; exports of trucks and motor-vehicle parts rose 28 per cent and 19 per cent respectively. Similarly, imports of automotive products rose by 3.2 per cent, especially parts, which were up 7.6 per cent.
Aircraft and machinery and equipment also moved quite vigorously back and forth across the Canada-U.S. border, belying the prevailing sense of doom about North American manufacturing.
While unemployment continues to rise in most of the country, its regional distribution is not what many would expect. Despite the woes of Ontario, the job losses are proportionately much worse in Alberta and British Columbia, provinces that may be ultimately more secure, thanks to commodities.
Likewise, the surprising 13.7-per-cent rise in housing starts in March, reported this week by Canada Mortgage and Housing Corporation, largely consisted of new condominiums in Ontario and Quebec, the very provinces where manufacturing has long predominated.
As for Canadian investment abroad, for the first time in statistically recorded history, Canada had a net asset position of $17-billion at the end of 2008 vis-à-vis the United States, as opposed to a net liability of $62-billion in 2007. In relation to all countries, our foreign investments rose by 24 per cent, mostly because the fall of the Canadian dollar raised the value of those assets in Canadian terms – but in any case the larger dividends and bond interest flowing into this country give Canadians more purchasing power.
The global recession is by no means over, but looking at the diversity of economic trends is a good remedy against panic.