West and Atlantic Out Performing Central Canada

Could it be that poor little Newfoundland and Labrador is really being recognized for its impact on the national economy? Could it also be that the impact of the eastern and western provinces on that economy was the impetus for the outcome of Monday’s election?

What follows are excerpts from an article today on interest rate hikes by Eric Beauchesne of the Ottawa Citizen. The article deserves a read if for nothing else than to finally see a situation where the beginnings of an upswing in Newfoundland and Labrador is finally being recognized.

Published: Thursday, January 26, 2006 - Ottawa Citizen

The Bank of Canada should not stop raising interest rates to try to cushion Central Canada's weak manufacturing sector from a stronger dollar, a major economic think-tank argues in a report released yesterday.

As the dollar flirted with a near-14-year high of more than 87 cents, the C.D. Howe Institute said monetary policy should not try to reconcile the growing economic divide between the booming resource-rich economies of Western Canada and Newfoundland and Labrador and the struggling, export-dependent manufacturing sector of Central Canada.

The report was issued in the wake of this week's sixth straight quarter-point increase…

…"Yet economy-wide statistics mask major regional disparities," it noted…

"Jobs and investment are flowing between sectors, and from Central Canada to the western provinces and Newfoundland. These changes will continue regardless of the level of the policy interest rate and the exchange rate…"

The complete article is available at: www.canada.com/ottawacitizen/