Mr. Speaker, on the surface the Canadian economy appears to be sailing smoothly. Yet, as the Moody's downgrade revealed, the buoyancy is deceptive. Three indicators are pointing to rough seas ahead.
The first is our sinking dollar. Since the release of the government's first budget our currency has lost more than 20 per cent of its value versus the yen and the mark. The Bank of Canada has only kept it afloat through high interest rates.
However, it is these high interest rates which have knocked the wind out of our sails, housing sales, that is, which hit a 13-year low in March.
While the combination of high interest rates and a depreciating currency roil the waters, the third storm cloud has appeared on the horizon. Inflation is re-emerging which will prevent the Bank of Canada from offering the interest rate relief we all need as Canadians.
The message is clear. Unless the government charts a new fiscal course for deficit elimination, not deficit reduction, our economy will end up on the rocks.