I'm actually going to have a piece in Canadian Business Magazine, I think in their year-end issue, talking about this exactly.
Very quickly, our view on the Canadian economy for the next year is a little more positive, a little more sanguine than others, because of the very strong income growth we see in Canada, which is going, to a great degree, to offset the loss of export growth as a result of the mess that's unfolding in the United States right now. Even in central Canada, we think Ontario and Quebec can achieve growth rates of, say, 2.5% in 2008. Now, that is not potential. That is not as good as they could be. But it is actually better than we've seen for the last year or year and a half, driven by strong real income growth and the tax cuts we're seeing across the board, which put more purchasing power in consumers' hands. That's a little better setting than some others would probably set out for you--western Canada, much stronger; Atlantic Canada, slower, as a foundation.
Tourism is a particular sector that's getting clobbered by the triple whammy of the rising dollar, slowdown in U.S. consumer growth, and security. We've not been able to make more progress to open the border. The United States keeps raising the bar in terms of security. Things like the Western Hemisphere Travel Initiative are really quite crippling to our tourism industry.
We're seeing a bit of an offset in terms of visits from other countries and we're seeing fairly strong domestic growth in tourism, but visits are down 20% from before 9/11, and that's a huge hole to have to fill, as the American consumer is feeling a little under attack right now because of the meltdown of their housing market and is coming to Canada and discovering that prices are the same as back home. So tourism is going through a really rough patch right now.
We think there are actually a few bright clouds in a dark sky, in that as Americans age and as populations age, tourists get a little less enamoured with visiting exotic locations and they might look a little more favourably on visiting Canada than they would on going to the jungles of Brazil. But that's only one positive factor in what's a pretty dark outlook for tourism.
If I were to tell the story around forest products, it would be very much the same story. It's been a very, very tough year for forest products, pulp and paper, in 2007-08.
For autos and parts it's the same, because of that sharp slowdown in demand in the United States, combined with the dollar at par.
We do central analysis. We actually do detailed forecasts for 16 sectors, and I've plucked out three or four that are actually the ones facing the most difficulty, we think, through 2008.