Thank you, Mr. Chairman.
Good morning, everyone.
Last January 30, the last time you appeared, Ms. Brunelle said that if we were in a recession, the United States was also in one. You answered: “As I mentioned in my presentation, the Canadian economy will grow during the first semester, but according to our reference scenario, there is no recession in the United States.”
Here is what was published in Le Monde yesterday:
[...] the central bank revised its growth forecast for the American economy in 2008 downward by 1.3% and 2%. [...] To avoid the recession, Mr. Bernanke has been lowering the cost of money for the past two months at a rate unprecedented since the 1980s. However, in his desperate attempt to shore up the bank system and the households of the nation, he is taking a risk, if he fails, of being confronted with a catastrophic scenario. After feeding an inflationary spiral [...]
Another article states:
In its study, the IMF explained that it was unlikely that Canada could dissociate itself from what is happening in the United States, given the fact that the commercial and financial links between both countries are among the strongest in the industrial world. Seventy-five per cent of Canadian imports go to the United States. The IMF wrote that Canada should be able to face this situation fairly well, but it insisted that there is a great risk of a downturn and that the country could fall into serious recession if the American economy continues to shrink, and if the American dollar plummets along with commodity prices.
In an article in La Presse Affaires, the chief economist of Scotia Bank, Warren Jestin, was quoted as saying:
According to Mr. Jestin, a substantial downturn in production and in job creation may prevail in the economic landscape of the main developed countries during the first semester of 2008, and it will be followed by a long period of convalescence. [...] Given the balance of payments of the United States, nothing seems to indicate that the depreciation of the dollar is drawing to an end [...]