Canada's Slower Growth Dilemma

IMF chief hails Canada as economic model for the world

TORONTO — The head of the International Monetary Fund says measures taken to protect Canada’s economy should be a model for countries trying to fix their financial systems.

Christine Lagarde said Thursday that Canada has been a leader in creating policies intended to rein in the build-up of household debt.

“Abroad, Canada is identified by its values of co-ordination and consensus building, which have given your country influence beyond its years,” she said.

Slower growth will sap Canada's economy

OTTAWA — Canada’s budget watchdog says slower growth will sap about $22 billion annually from the country’s economy.

Parliamentary Budget Officer Kevin Page says in a new report that he anticipates economic growth will brake to an annual rate of 1.6% in the second half of this year, after slowing to 1.8% in the first half.

He’s not much more optimistic going forward, forecasting tepid growth rates of 1.5% in 2013 and 2% in 2014.

That’s at the bottom of most economic forecasts and well below the Bank of Canada’s projections of growth rates of 2.2% in 2012 and 2.3 and 2.4% in the two years after that.

At the weaker levels, the PBO says Canada’s nominal gross domestic product — from which Ottawa derives tax revenues — will be $22 billion lower annually.

My view:

Is the IMF endorsement of changes to its lending laws something Canadians should be proud?

The IMF, member of Europe's infamous Troika, is singing the praises of recent economic policies designed to slow and reduce household debt.

Given the experience of several nations under its watchful eye, such as Spain and Greece with their austerity experiments, one wonders if Christine Lagarde has given Canada the proverbial kiss of death?