Canadian upturn is solid - but spotty
Montreal — Is Canada over its worst recession in 50 years? It all depends on where you live. The government says officially that the recession ended early last year. There is plenty of evidence to support that conclusion - and to show that the Canadian economy is in a sharp upturn.
Moreover, a variety of forecasts suggest that Canada's rate of economic growth during 1984 could be much better than that of the rest of the industrialized world. But for large numbers of Canadians, all this is so much talk; the recession is still very much a part of their lives.
Canada's recovery clearly is very spotty. Many regions outside Ontario and Quebec, the two most industralized provinces, show few if any signs of recovery. In eastern Newfoundland and western British Columbia, there are actually fewer people working today than a year ago - and in Alberta, the heart of Canada's oil and natural gas industry, the situation is little better. Unemployment in these areas is as high as 15 percent, while it is lower than 10 percent in Ontario.
The Canadian Manufacturers Association, in a year-end statement, says that ''regional variation (in employment) is more evident than at any time in perhaps the last 50 years.''
Regional variation showed up dramatically in new job creation during the year ending Oct. 30. Of 355,000 new jobs, slightly more than 82 percent were in Ontario (201,000) and Quebec (92,000). Most of the remaining 62,000 were in Nova Scotia and Saskatchewan.
A number of Canadian bank economists expect regional variation to continue. The federal government is under pressure to remedy the unevenness. Finance Minister Marc Lalonde must combat high unemployment, particularly in provinces yet to respond to the recovery.
But the US-based Conference Board says Canada's rate of economic recovery has not yet peaked and will be faster than the rest of the industrialized world. It forecasts a 7 percent annual rate, up from 5 percent three months ago - but still behind the US rate of 11 percent. The US and Canada, according to the Paris-based Organization for Economic Cooperation and Development, are expected to outpace growth in most of Europe.
Behind these favorable forecasts are various improvements in the Canadian economy:
* Christmas sales volumes were substantially higher than expected in earlier forecasts - with an estimated 15 percent improvement over the volume one year before. Consumer spending boosted prices on the Toronto Stock Exchange, particularly in shares of companies doing big business at the holiday season. But spending varied among the provinces and was weaker in Alberta, British Columbia, and Manitoba.
* Annual inflation fell to 4.2 percent in November - the lowest in 11 years - in part due to a drop in food prices.