Canada trails U.S in economic recovery | Calgary Herald
calgaryherald.com
(Bloomberg) — Canada’s economic recovery trails that of the U.S. due partly to the decline of exporters in the country, Royal Bank of Canada Chief Executive Officer David McKay said.
“We lost over 7,000 export-oriented companies since 2008 on the stronger dollar, hundreds of thousands of employees,” McKay said Thursday at Bloomberg’s Canada Economic Summit in Toronto. “A lot of that was a permanent loss to Mexico, U.S. offshore capability and obviously China.”
Canada’s gross domestic product may expand by two per cent this year and could increase to 2.5 per cent next year, McKay said. That compares with U.S. economic growth forecasts of 2.5 per cent and 2.8 per cent, respectively, according to data compiled by Bloomberg.
“We should have come out of this a lot stronger than we have, given the strength of the U.S. economy,” McKay, 51, said in the interview. “We’re going through a fundamental restructuring of our export capabilities and our export companies.”
Finding new export markets takes time and that’s slowed recovery, McKay said. Falling energy prices have also had an impact, especially on the oil-driven economy of Alberta, said McKay, who visited Calgary earlier in the month.
“It feels pretty grim, there’s a lot of uncertainty in the marketplace around the price of oil,” McKay said of his visit with business leaders. Still, despite cuts by energy companies ranging from capital expenditures to jobs, McKay sees the situation as manageable as oil prices climb higher.
Oil Recovery
“There is going to be a modest recovery in the price of oil,” McKay said. “We’re calling for oil prices a year somewhere in the neighborhood of $70.”
While prices at that level will provide stability for Canada’s top-tier energy producers, smaller producers will still be challenged, he said.
Bright spots include British Columbia, with a “fairly strong” economy and balanced growth fueled by exports to Asia and the U.S., and more tourism due to the weaker Canadian dollar relative to the U.S. greenback, he said.
The country’s housing market is “on solid ground,” McKay said, with supply and demand based on fundamental growth in the marketplace and not mimicking the U.S. circumstances that lead to the financial crisis in 2008.
“What got the U.S. into trouble obviously was artificial demand and excess supply, and a correction happening,” McKay said. “We just don’t see that in Canada.”
Separately, McKay said in a Bloomberg TV interview that the Toronto-based bank doesn’t need to make any more U.S. acquisitions following its $5.4 billion agreement in January to buy Los Angeles-based City National Corp. A weakened Canadian dollar relative to the U.S. currency has made pursuing acquisitions more difficult, he said.
Canada trails U.S in economic recovery | Calgary Herald
calgaryherald.com
(Bloomberg) — Canada’s economic recovery trails that of the U.S. due partly to the decline of exporters in the country, Royal Bank of Canada Chief Executive Officer David McKay said.
“We lost over 7,000 export-oriented companies since 2008 on the stronger dollar, hundreds of thousands of employees,” McKay said Thursday at Bloomberg’s Canada Economic Summit in Toronto. “A lot of that was a permanent loss to Mexico, U.S. offshore capability and obviously China.”
Canada’s gross domestic product may expand by two per cent this year and could increase to 2.5 per cent next year, McKay said. That compares with U.S. economic growth forecasts of 2.5 per cent and 2.8 per cent, respectively, according to data compiled by Bloomberg.
“We should have come out of this a lot stronger than we have, given the strength of the U.S. economy,” McKay, 51, said in the interview. “We’re going through a fundamental restructuring of our export capabilities and our export companies.”
Finding new export markets takes time and that’s slowed recovery, McKay said. Falling energy prices have also had an impact, especially on the oil-driven economy of Alberta, said McKay, who visited Calgary earlier in the month.
“It feels pretty grim, there’s a lot of uncertainty in the marketplace around the price of oil,” McKay said of his visit with business leaders. Still, despite cuts by energy companies ranging from capital expenditures to jobs, McKay sees the situation as manageable as oil prices climb higher.
Oil Recovery
“There is going to be a modest recovery in the price of oil,” McKay said. “We’re calling for oil prices a year somewhere in the neighborhood of $70.”
While prices at that level will provide stability for Canada’s top-tier energy producers, smaller producers will still be challenged, he said.
Bright spots include British Columbia, with a “fairly strong” economy and balanced growth fueled by exports to Asia and the U.S., and more tourism due to the weaker Canadian dollar relative to the U.S. greenback, he said.
The country’s housing market is “on solid ground,” McKay said, with supply and demand based on fundamental growth in the marketplace and not mimicking the U.S. circumstances that lead to the financial crisis in 2008.
“What got the U.S. into trouble obviously was artificial demand and excess supply, and a correction happening,” McKay said. “We just don’t see that in Canada.”
Separately, McKay said in a Bloomberg TV interview that the Toronto-based bank doesn’t need to make any more U.S. acquisitions following its $5.4 billion agreement in January to buy Los Angeles-based City National Corp. A weakened Canadian dollar relative to the U.S. currency has made pursuing acquisitions more difficult, he said.
Canada trails U.S in economic recovery | Calgary Herald
