Economic Recovery Taking Its Time

We know. Just a couple of days ago on the Synergy Merchant Services Blog, we insisted that we would do our best to try to look at “the bright side” of the economic crisis that has affected Canada over the past year. And, mark our words, we remain confident that for the most part, we will continue to seek out the positive in all bad news that comes our way. We may need your help on this one though.

Just when you thought the nation was on the road to recovery, today The Canadian Press reported that 2,600 Canadians lost their jobs in the month of December. This is especially disappointing considering that 79,000 jobs were gained just a month earlier. Even more upsetting is the fact that Synergy’s home province of Ontario “continued to be among the worst performers, with the jobless rate at 9.3 per cent”.

Quoted in The Toronto Star about this issue, United Steelworkers economist Erin Weir said: “With some signs of output beginning to recover but employment still flat, governments should be contemplating job-creation programs in preparing their upcoming budgets.”

Not surprisingly, there is early evidence that a full recovery from the recession will be a long and arduous process. Canadians are joined by the hope that the nation’s economic conditions will improve and that the employment rate will increase sooner than later. Prime Minister Stephen Harper apparently shares this sentiment as, in an interview with CBC-TV this week, he commented about wanting to see the unemployment rate return to approximately 6 per cent.

Perhaps the Prime Minister feels on the hook for the slow rise in Canada’s economy as the federal government has spent billions of dollars trying to combat the recession. Economists do not seem to be all that optimistic about recovery just yet.

Said Weir: “Given widespread layoffs and much higher unemployment, one suspects the ongoing surge in self-employment is mostly involuntary…Workers are struggling to generate income through self-employment since jobs are unavailable.”

The Canadian Press did, however, note that some economists are joining us in searching for that bright side as it relates to the nation’s financial position. According to the report, the Canadian economy did add 33,000 jobs over the course of the past three months.

Scotiabank’s Derek Holt believes that this trend will continue in the new year. As Holt wrote: “Jobs are poised to grow in 2010. As U.S. supply chains heal and start adding jobs, the trickle across the border into Canada will lead to job gains through seamlessly integrated cross-border production. Fiscal stimulus is also likely to begin raising Canadian and U.S. jobs.”