Marking a powerfully surging economy that is firing on all cylinders, Canada’s gross domestic product passed the $ 1-trillion mark. The record-breaking gain in the value of goods and services was achieved in the first quarter, when the GDP hit $1,006,952,000,000 on an annual basis. The economy had grown by a yearly rate of 4.9 per cent, continuing a string of consecutive gains that has now gone on for 19 quarters. That is the longest uninterrupted expansion in more than a quarter century. In the same report, Statistics Canada revised its GDP numbers for last year, concluding that the economy grew by 4.5 per cent, instead of 4.2 as previously reported. The new figure pushes Canada ahead of the United States, which
posted growth of 4.2 per cent in 1999.
The first-quarter gains were impressive on several fronts, including exports, especially to the United States, and per capita income, which climbed by 1.4 per cent. Finally shaking off the shadow of the last severe recession in the early 1990s, wages showed their biggest three-month rise since the late 1980s, and shoppers were again out in force.
Chapters considers turning a page
Giant bookseller Chapters Inc. of Toronto said it may sell its controlling interest in wholesale book distributor Pegasus Wholesale Inc. Chapters CEO Larry Stevenson said the sale is being considered as a way to bolster Chapters’ share price, which is hovering around $12, compared with a 1999 high of more than $35. Others, however, suggested that Chapters is trying to satisfy the Competition Bureau, which is reviewing allegations from some booksellers and publishers that Pegasus gives Chapters unfair control over the wholesale distribution of books.
The booming world economy could be too much of a good thing. That warning is from the Organization for
RACING TOO FAST? OECD forecasts of reai GDP growth for G-7 countries
Economic Co-operation and Development in its recent financial outlook. The OECD forecasts that member countries’ gross domestic product will grow by four per cent this year and another 3.1 per cent in 2001. But it warns that with so many countries booming, there is a risk they will reinforce one another’s growth. That could lead to inflation and other economic excesses, which have triggered recessions in the past. The OECD wants governments to refrain from large tax cuts or spending increases and urges Canada to use government surpluses to pay down the debt.
Equal rights for cars
Under a final ruling from the World Trade Organization, Canada must modify the Auto Pact and the 6.1-percent tariff it imposes on cars imported from overseas that are not produced by the Big Three U.S. automakers. Currently, luxury makes like MercedesBenz and Jaguar enter Canada tarifffree because they are owned by DaimlerChrysler and Ford respectively, while independent competitors like BMW and Toyota have to pay. Insiders say Ottawa, required to treat all imports equally, is leaning towards imposing the tariff on all overseas cars rather than scrapping it.
A Toronto-based company that runs chartered airline flights for travel companies announced that it will launch a new airline aimed at competing with Air Canada for business-class customers. Skyservice Airlines Inc. said it will likely offer one or two daily flights on busy routes and provide highquality service at rates lower than Air Canadas. Air Canada, meanwhile, said it will add flights to a range of new overseas destinations, increase staff and spend $2.5 billion to upgrade its fleet.
The pnce of comfort
Four Seasons Hotels Inc., the international luxury chain founded by Winnipegger Isadore Sharp, said it plans to expand aggressively into the market for luxury condominiums and timeshare resorts. The company now has 48 buildings and plans to add 19 more around the world over the next three years. Four Seasons has recently been selling 90-square-metre condominiums in San Francisco for $1.5 million.
Finance Minister Paul Martin is moving ahead with wide-ranging new banking legislation that will loosen some ownership rules while giving the government greater control over mergers and investments. Some industry critics had hoped the proposals, outlined in a discussion paper last year, would fade away as a potential fall election loomed. They include a gruelling procedure for merger approvals.
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