This morning, Statistics Canada reported zero economic growth in October. While growth had been driven by strong mining and fossil-fuel exports during the third quarter, Canadians got a lump of coal in October.
This Christmas goose egg should come as a wake-up call to economic policymakers. It follows Labour Force Surveys showing two consecutive months of job losses and higher unemployment.
The Prime Minister recently stated that deficit reduction will be his top priority in the New Year. Instead of cutbacks, the top economic priority should be to support growth and create jobs through renewed public investment.
Just a few months ago, the C. D. Howe Institute was lobbying the Bank of Canada to hike interest rates. Today’s GDP report confirms that, if anything, our central bank should consider reducing rates. The Canadian economy needs accommodative monetary and fiscal policy, not austerity.
Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.
UPDATE (December 24): Quoted in today’s Globe and Mail (page B5), Toronto Star (page S15), St. John’s Telegram (page C2) and Waterloo Region Record (page E1)
