Business Reporter
Groceries will be more expensive. So will that drive to the cottage. And a sharp drop in exports means that the Ontario economy is facing two more painful years.
Canadians were hit with a series of dire reports yesterday – underlining the fact that difficult times are ahead – particularly if you live in Canada's most populous province.
In a bleak forecast, the Bank of Canada said a dramatic weakening in exports will cause the national economy to struggle this year, but it will narrowly avoid stalling out completely.
Exports, which account for more than 40 per cent of Ontario's gross domestic product, will come back to life in the second half of 2008 but will not show solid growth before 2010, the bank forecast. Ontario's all-important auto manufacturers export more than 85 per cent of what they produce to the U.S.
"Reading between the lines, this clearly isn't an upbeat picture for Ontario," said Doug Porter, the deputy chief economist at the Bank of Montreal.
For those with jobs, getting to work will be more expensive.
CIBC chief economist Jeff Rubin thinks gasoline will top $1.40 a litre this summer, and end up costing as much as $2.25 a litre by 2012.
"Oil prices will continue to rise steadily over the next five years, almost doubling from current levels," Rubin said yesterday.
He expects the cost of crude to hit $225 (U.S.) a barrel by 2012. Increased demand from such countries as Russia, India and China is pushing prices steeply upward, Rubin added.
You won't catch a break at the grocery store either. Canadians can expect to see steep price hikes this summer stemming from global shortages of staples such as wheat and rice.
"Food will be considerably more expensive well into the future," Michael McCain, the chief executive officer of Maple Leaf Foods Inc., told shareholders at the company's annual general meeting yesterday.
McCain said his company has raised bread prices three times over the past 18 months, but that hasn't been enough to keep up with the cost of wheat. Pork prices are expected to increase over the next year as well, he said.
The Bank of Montreal released a gloomy report yesterday on the Canadian dollar, which appears to be stuck below parity with the U.S. greenback. That's partly because there haven't been as many foreign takeovers of Canadian companies in recent months, Porter said.
Leo (July 23 — Aug. 22)
Change is the basic rule of existence. It's impossible to hold on to anything for long – not even our problems. The flux of life is essentially working in your favour.
Gemini (May 21 — June 21)
Some people conveniently omit important facts. You may not feel sure who you can believe at the moment, but don't let that concern you. Believe in yourself and you'll turn the impossible into the feasible.
Pisces (Feb. 20 — March 20)
A splendid alignment from Venus to your ruler will illuminate a dark and shadowy area of your life. A long-standing conundrum will be solved.
Scorpio (Oct. 24 — Nov. 22)Yet again, you face the task of undoing a chaotic situation brought on by someone's stubborn resistance to take advice. You could do it faster if you weren't getting so many helpful contributions from a particular source.
Read Phil Booth at boothstars.com or at thestar.com/horoscope.
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