HARPER: 'THE WORST IS BEHIND US'

Prime minister encouraged by new data that suggests economy is in recovery mode

JULIAN BELTRAME
THE CANADIAN PRESS OTTAWA

Canadians have reason to breathe a little easier -- the economy fell sharply at the start of the year but talk about another depression appears to have been just talk.
Having been given the best economic news in months, Prime Minister Stephen Harper was quick to take advantage yesterday, saying the Liberals have no reason to push for a federal election.
"I think the worst is behind us, we will have better quarters going forward,'' Harper said in an interview with a Toronto radio station.
"I think that's one of the reasons (Liberal Leader Michael) Ignatieff seems to be pushing so hard with ideas to get the other parties to bring the government down. He would love the opportunity to get in there for a recovery. The country needs an election like a hole in the head,'' Harper added.
The output numbers for the first quarter of 2009 were nothing to boast about. The economy contracted by a massive 5.4 per cent at an annualized rate, the worst in 18 years when there was a 5.9 per cent decline in 1991.
But with the Bank of Canada having projected a 7.3 per cent collapse and some economists saying the decline could be as much as nine per cent, the Statistics Canada data has the feel of a death row reprieve.
And the improving data for the last two months of the quarter -- February and March -- suggests that as Harper noted, the worst is likely over and it happened during the November-January period.
"It is the worst recession since the Great Depression globally, but this is where some of Canada's positives have come back to save us a bit from something nastier,'' said Douglas Porter, deputy chief economist with BMO Capital Markets.
"Make no mistake, it's a very severe downturn. But we've been through these kinds of severe downturns before in the early '80s and early '90s.''
Combined with the revised 3.7 per cent drop in the fourth quarter of 2008, Liberal finance critic John McCallum said the slump still qualifies as among the worst since quarterly data began being kept in 1961.
But he too expressed relief that "there is less panic than there was a while ago . . . and more sense that, 'Yeah, we are going to get out of this."'
McCallum said his party will still press for improvements to unemployment insurance to ensure that more laid-off Canadians qualify for benefits, saying the economy will likely continue to shed jobs for months to come.

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