Paying Down Debt vs. Savings

The great Canadian conundrum – live for today or tomorrow? In an era when money is tight and many families have to make tough financial decisions, the question of priorities arises. How much should one save for the future? How should one juggle his current needs with future needs?

Certainly, young couples face this dilemma. By trying to squirrel away retirement money and manage a young household, many couples begin to choke. Experts advise that the best strategy is to erase debts before saving money. Start by paying down credit card bills. The result is a guaranteed after-tax return of 18%. No RRSP will offer that rate of return! Try, as well, to whittle down the mortgage. Once these debts are out of the way, you can re-direct the money into your RRSP.

In addition to the debt-first strategy, the next step, once you're ready to invest, is to prepare yourself for the inevitable. Since you can't predict the future, try to be in control of your options as best as possible.

Plan your investments with some foresight. Rather than look for the best deal today, try and decide what your future needs will be and work backwards. Invest in ways that will best fit your needs. Try to find the best mix of stocks and bonds for you and stick to that mix. Markets shift but your long term consistency should work to your benefit. Also, try and limit your risk. Some is necessary but everything in moderation. Consider a 60-40 mix of stocks and bonds. Once a year, take some money from the more profitable side and bolster the lagging side. This way, you will always buy low and sell high.

Remember the sage advice – be in control of your money; don't let your money control you!

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Canadian Consumers May Rock Economic Recovery

Recent statements by Bank of Canada governor, Mark Carney, reflect a spirit of optimism but also carry an undertone of warning.

Despite the recession, Canadians have amassed greater debt, due, in part, to the low interest rates currently dominating the market. These rates, currently at an historic low of 0.25%, were set by the Bank of Canada as emergency interest rates in order to resuscitate an ailing economy. The rates will rise eventually and Mr. Carney, as well as other leading economists, fear that many Canadians may be caught short. Mortgage rates have been extremely low for months while housing prices have rebounded. This has created a perfect setting for many Canadians to take on large debts. However, as the economy improves, interest rates may rise, at a quicker rate than they dropped. Mr. Carney is cautioning Canadians that purchasing a more affordable home today may be a wise choice.

One of the early warning signs of Canadians over-extending is the rise in personal bankruptcies. The third quarter of this year showed a 41 per cent jump compared to the same period in 2008. Similarly, the delinquency rate of mortgage payments has risen by 50 per cent in the last year.

The governor emphasized the vulnerability of the country's economy due to household defaults. As consumers are the key drivers to the nation's economic recovery, Mr. Carney, therefore, hazards Canadians about avoiding credit risks. Of course, a similar warning has been issued to lending institutions to properly monitor household credit.

Mr. Carney strongly believes the Canadian economy is definitely on the rebound and he expects Canada to outperform the other G7 countries. However, Canadian households will play a vital role in that economic recovery and the governor hopes that Canadians will act with economic responsibility for the collective good of the nation.
 
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How to Avoid Being Defrauded

As if the recession hasn't presented us with enough business and financial worries, a new item has been added to the worry menu.
 

According to the 2009 PricewaterhouseCoopers' Economic Crime Survey, some 56 percent of companies surveyed have reported falling victim to white collar crime in the last year's survey period. This number reflects a 4 point increase over the last two years. Indeed, the figures are the highest in the last six years. There has been a 10 point increase since 2003.
 

It would appear that difficult economic times increase the incentive to commit fraud as a source of income. The end result is due, in part, to a greater vulnerability of many companies whose control systems have been weakened or even eliminated due to downsizing and cost-cutting. Fewer funds are being allocated for fraud detection, prevention systems and investigation. As a result, financial fraud is increasing both from within and outside organizations.
 

Certain sectors have suffered from fraud the worst in the last year including communication, financial services, insurance, hospitality and leisure. Asset misappropriation and accounting fraud were the most common types of fraud encountered by the companies surveyed.
 

As an end to the recession is not yet in sight according to many experts, it is felt that fraud may continue to increase. Certainly, as many companies are yet to take preventive measures, there are adequate opportunities for the talented white collar criminal.
 

Canadian judges have responded to this increase in fraud crime by handing down severe and harsh punishments for those found guilty. But, the number of crimes reported far exceeds those caught. Businesses would be well advised to keep their eyes open and their systems well protected.

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Stimulus Funds in Canada to Become Permanent?

Much has been written these last few months about the effects if the recession, or whatever term one may wish to call the global economic situation since last year. Some countries have weathered the storm better than others. Certainly, Canada, while by no means having fully recovered, is on much stronger financial footing as compared to our neighbours to the south. Experts have attributed many factors to Canada's relative strength. But, putting aside the past, the questions that still remain unanswered pertain to the future.
 

One factor that is contributing to Canadian recovery is the strength of public confidence. As the belief in the stability of the economy grows stronger, the recession and its effects recede that much more. However, what will be if the global economy takes a nosedive once again. Are we prepared for that?
 

The Canadian government has been a major player in managing the recession and orchestrating the country's recovery. A large factor has been the availability of federal funds available through a variety of programs tailored to the various needs of the business community. While these programs were designed as a temporary stopgap to help weather the storm and keep the business sector liquid, government officials are now asking themselves whether it might be wise to make a basis of liquidity permanently available.
 

On one hand, officials see the inherent benefit of providing funds to facilitate the continuous functioning of core markets. On the other hand, researchers for the Bank of Canada are concerned that these "permanently available" funds might induce investors to take on excess risk, secure in the knowledge that there will always be a bail out plan ready.
 

While the debate continues, the government and the central bank have learned that they must maintain sufficient flexibility and readiness to respond to any future liquidity problems.

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Keeping Your Client Base: How Important is One Customer?

  If it came to a debate, the truth is that both opinions would be on the same side. Those who have succeeded in their business ventures will tell you what newcomers to the business world don't always know – it is far more important to hold on to strong customers rather than just finding new ones.
 

Of course, logic might deem otherwise. Shouldn't I always be on the lookout for new customers? Shouldn't I try to inflate my customer base, making it as large as possible? Let there be no misunderstanding. Customers are very important to a business. After all, no business, no income. But, let's be honest. Is there any guarantee that the new customer that you found yesterday will still be there tomorrow? On the other hand, even in times that are less than the best, the chances are quite good that a long-standing, loyal customer will still be there.
 

Client retention is vital to the longevity of a business. It is not enough to lure customers through pricing that beats the competition. After all, tomorrow the competition may lower his prices and your customer will follow the price trends.
 

Studies have shown that retaining customers will positively impact the bottom line of a business up to 15 times more than landing new customers. That's money in your pocket at a much lower risk.
 

Providing great service is not enough to guarantee customer loyalty. It is imperative to develop an actual relationship. Make the relationship deep enough so that the client will not be tempted to take his business elsewhere. When you develop a level of trust with your client that, ultimately, helps him as well as you, you will manage to build a relationship that will remain strong, even when times are tough.

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Telephone Etiquette for Small Business 101

It may sound like a trivial subject, but that is far from the truth. Even in this computer age, the telephone is your front line. More often than not, a business is judged by how one is received over the telephone. Give the wrong impression and the transaction is over.

Try and be prompt. Don't let the telephone ring off the hook. No more than a few rings if necessary.

It is important to convey enthusiasm and professionalism. A warm, clear response, coupled with moderate tones and proper language convey a highly, professional image. Accents are most acceptable but improper language is not. Try and avoid using slang and leave professional jargon out of conversations with laymen.

Avoid leaving people on hold for an extended period of time. Even though the music on hold may be quite pleasant, remember to check back every half minute or so. If the desired person is not available, or will not be free to take the call for several minutes, offer to take a message before the caller asks.

We all have bad days. However, the rule of thumb is to leave it at the door. Don't convey your negative feelings to the caller.

Speakerphones should be avoided. The caller can hear when they are speaking to someone on a speaker. It gives the impression that you are simply too busy to lift the receiver.

If your telephone system is automated, be sure that the recorded voice sounds professional and that the information in the system is current.

Finally, be prompt about returning calls. If someone left a message, they do wish to speak to you. Good business sense dictates that a timely reply is the best course of action.
 
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Living Week by Week: Rough Economic Times for Canadians

The results of a new poll released this week by the Canadian Payroll Association revealed some surprising statistics and facts about the average Canadian household. A one week delay in receiving a paycheque would render nearly 60 percent of Canadians unable to pay their regular bills. Moreover, the same majority group has little or no ability to set aside money for retirement funds.

These surprising results have shed new light on the financial condition of many Canadian homes during these rough economic times. Despite common financial advice that people should have an emergency cash reserve for three months of expenses, the majority of households surveyed admitted that they are happy if they can make it to the next paycheque, let alone save for retirement or emergencies.

The younger workforce is in greater distress. 45 percent of workers aged 18 to 34 are feeling the crunch and feel that they are having trouble making ends meet. A delay in being paid would spell disaster. 72 percent of single parents responded in a similar fashion.

Regardless of age, the survey revealed that half of all Canadian workers are unable to save more than five percent of their net income for retirement. Financial planners recommend that ten percent is an advisable amount. However, the recent fluctuations in the stock markets have made saving for retirement far more challenging. Nearly one third of Canadians are trying to save more money but they can't. 42 percent admit that they aren't trying at all to save more.

Despite the variety and wide array of financial products being offered to Canadians by financial institutions nationwide, many Canadians seem pleased if they can pay their bills after payday.

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Credit Now Available From The Federal Government

A person needs oxygen to survive. A business needs credit. Even in the most difficult of times, the flow of oxygen remains uninterrupted. Not so, however, with credit.

Many a business has seen its line of credit be reduced or cancelled over the course of the last year. Financial institutions, seeking to reduce risks on unsecured or unstable credit lines, have made obtaining funds ever more difficult. This move has dealt a crippling or death blow to many small businesses in Canada.
Under Canada's recent Economic Action Plan, designed to stimulate and strengthen the Canadian economy, the Federal government is sponsoring a program that will work with financial institutions in the private sector. The Business Credit Availability Program (BCAP) will provide loans and other forms of credit support to creditworthy businesses. At least $5 billion has been allocated in loans and other forms of credit support for business enterprises with viable business models but, for various reasons, have limited or no accessibility to financing.

The BCAP is a joint venture between two financial Crown corporations and private Canadian financial institutions. The steering committee is comprised of senior representatives of all sponsoring parties whose experience and commitment have establishes a program with initial promising results. Similar to credit issues, discussions are also being conducted to examine ways of providing accounts receivable insurance.

Business owners and entrepreneurs seeking assistance through this program to support their established operations and preserve jobs should contact their financial institutions to discuss their needs and eligibility. Your financial representative can advise you which program is best suited for your particular situation.
 
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Is Canadian Employment on the Rise?

Statistics are like a cat. Rub its fur one way and it purrs; rub the other way and the results are somewhat less positive.

So it is with employment figures released by Statistics Canada for the month of August 2009. Stephen Harper's Conservative government is giving a positive spin to the 27,100 net jobs gain for the month. The announcement triggered an eight-tenth of a cent rise in the Canadian dollar, although higher crude oil prices may also have influenced the dollar's rise. Some leading economists have announced that this is an indication of the end of the recession. All this sounds rather encouraging.

Critics, though, are quick to note that many Canadians are not feeling quite as positive. Most of the new jobs were part-time only. The number of unemployed rose in August by 21,900, bringing the total number of unemployed Canadians to 486,000 since the global financial crunch of October 2008. The decline in the manufacturing sector has continued, although construction has begun to stabilize. Most of the new part-time jobs were in the lower paying service sector. Higher paying, high productivity work fell by 17,300 positions. Full-time work continues to be in a decline.

Certainly, there is cause to be optimistic. As one economist stated, half a job is better than no job. Economic indicators seem to point in a positive direction. But, one month of net growth may be far too early to establish a positive trend. Canada may well be on its way to economic recovery. Nearly half a million unemployed Canadians certainly hope so.

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The Price of Ending the Recession

Government officials and economic analysts are in common agreement that Canada is headed out of the recession. While there are disagreements as to the exact timeframe, there is a fact that is common to all parties – the price tag.

For a country that proudly presented a balanced budget for twelve consecutive years, Canada had to revise its budget projections for the thirteenth year and for several years to come. Canadian Finance Minister Jim Flaherty recently announced his department's projection of a $50.2 billion deficit for the current fiscal year. He was quick to add, though, that this figure is "consistent" with meeting the deficit target. The government projects that it will present deficit budgets for the next four years, adding nearly $100 billion to the national debt. The current deficit is due primarily to several factors: falling tax revenues, both personal and corporate; a massive 47% increase in unemployment insurance premium payouts; and huge bailouts to the auto industry as well as other business subsidies.

While Mr. Flaherty is holding to his optimistic prediction of returning to a balanced budget in 2013-14, Prime Minister Stephen Harper, and several leading economists are somewhat more realistic in their forecasts. However, both the Prime Minister and the Finance Minister are in agreement that tax increases and major spending cuts are not being considered in order to expedite a balanced budget.

Some analysts have suggested that drastic changes to the budget are not advisable. Rather, once the stimulus programs spending has been depleted, the government should adopt a program to control spending growth. This will enable the government to eliminate the deficit over a period of several years.

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Cyber-Shopping Anyone?

In a country that is so highly attached to Internet access and the latest high-tech gadgetry, Canadians are slow to adopt the trend of cyber-shopping – shopping online. Online sales have certainly been growing at a steady pace - a 61% rise in three years – but they still lag behind online sales in the United States.

Analysts attribute Canadian reluctance to become cyber-shoppers to several factors. High shipping costs in Canada have caused a large number of shoppers to abandon their online purchase before completing the transaction. Additionally, when it comes to security, Canadians are far more sensitive than most other nations around the world. Simply put, many Canadians have an abiding fear of credit card fraud and are skeptical about revealing their credit card details online.

On the other hand, the rise of specialty brands online is winning over Canadian reluctance. The allure of securing hard-to-get brands or one-of-a-kind items has been a boon for many online retailers.

Some of the nation's larger retail outlets use their websites primarily for marketing and rely upon their sites to attract buyers to their stores. This has allowed a market to open up for smaller retailers whose "primary store" is located on the Internet.

Consumers still expect top service wherever they buy. For online stores, this translates into speedy and affordable delivery as well as reliable customer service. Moreover, online stores must market their sites in a variety of ways if they are to be noticed.

The variables of the economy affect the online stores as much as traditional shopping outlets. When consumers are in a spending mood, they are more likely to shop for items online that may be frivolous or unnecessary. However, when belt tightening begins, online retailers have to rapidly shift their focus to marketing items that are more affordable.

With annual sales in excess of $15 billion, and growing, cyber-sales seem to have carved out a niche with the Canadian consumer.

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Introducing CanNor, Canadian Northern Development Agency

Following promises made in last fall's election campaign and, more recently, in last November's throne speech, Canadian Prime Minister Stephen Harper revealed that the headquarters for the new Canadian Northern Development Agency (CanNor) will be built in Iqaluit, capital of Nunavut.

The Prime Minister's announcement was made during a recent tour of the North, his third tour of the region this summer. CanNor will deliver funding for economic development, advocacy, and research. The newly established agency will receive $50 million in federal funds over the next five years.

The decision to locate the new agency's headquarters in Iqaluit has been met opposition from several senior government officials, stating difficulties finding enough housing and staff. Mr. Harper responded that challenges such as these are exactly the reason for establishing an economic development agency and, therefore, the government must place the agency directly where the challenges are the greatest.

CanNor will also have satellite offices located in Whitehorse and Yellowknife, as the agency is designed to work cooperatively with all the Northern territories. The new agency will take over some existing federal programs and will develop new programs adapted to the territories' realities.

As several other nations have their sights on the resource-rich northern territories, the Harper government is determined to concretize Canadian sovereignty over the region. Establishment of this stand-alone regional economic development agency will allow the Federal government to work with the region to help it reach its full potential, both human and economic.

The Premiers of both the Yukon and Northwest territories welcomed Mr. Harper's announcement but added that additional key economic developments are crucial to their respective territories in order to strengthen the entire Arctic region.
 
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Promoting Your Business on Social Networks

"The times they are a changin". Bob Dylan wrote these words nearly 45 years ago. He must have been predicting the future.
It used to be quite common that people assembled at social events and exchanged ideas, recipes, political viewpoints, and suggestions on where to shop for the best value. The 21st century has not replaced the traditional social gathering. However, it has augmented that with the modern and very powerful equivalent – the social media network.

Marketing studies have shown that recommendations from friends and family have the greatest influence on what people purchase. As millions have become attached to various social networking sites that connect people with similar interests worldwide, the circle of influence grows much larger.

While most social media sites are not designed as shopping venues, marketing specialists know that exposure on these sites can be extremely valuable. A prime example is Facebook. Facebook has more than 200 million subscribers worldwide. Members enter their profile on the site. Generally, this includes your demographics, preferences and, often, your occupation. Marketing pros at a company will post an attractive profile for their product or service. As soon as a Facebook member visits that company's profile, they are identified as a potential customer. Most Facebook members openly display their friends' networks. This enables the same company to view this circle of friends also as potential customers. Moreover, as the company can obtain a substantial amount of personal information about its online customers, this information can be extremely helpful in future marketing strategies and product development.
Businesses have discovered that social networks afford exposure to their companies that otherwise might not occur. However, it is wise to keep in mind that these are social networks and acceptance of a commercial presence will require imaginative marketing, rather than mere technical placement of corporate material.
 
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Is a Second Round of the Recession on the Horizon?

Speculation has been growing in some economic circles that a "double-dip" recession – a second wave – is a distinct possibility. Some investors and economists fear that the government stimulus programs in various countries have managed to stabilize economies but have failed to jump start any long term growth.

Countries like Japan, Germany, and France have recently posted positive growth figures for the second quarter. However, world stock markets have remained fairly volatile.

The growing fear is that growth generated by the trillion of government stimulus dollars is only temporary and will cease as soon as the governments cease funding the various programs, most probably within the coming year. Thus, the term "double-dip" has come into use.

In order to truly declare an end to the recession, countries should be experiencing substantial sustained growth in consecutive quarters. This has failed to materialize yet in any significant fashion. Certainly, there is reason to be optimistic but consumers have yet to display a return to a strong buying mentality. Many are still in a savings mode, particularly in the United States. Even though interest rates are at an historic low in the U.S., many consumers fear taking on any more debt. Canadians are faring better than their neighbours in the U.S., but they, too, are still leery about the economy, as unemployment is still rampant in the nation, especially in the manufacturing sectors.

Economists hope that governments will not make the mistake of ending the stimulus packages too early. A good beginning can lead to a stable financial future if the elements of recovery are managed properly and timely.

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How to Reduce Your Business Costs

Desperate times call for desperate measures.

This old adage has become the modern modus operandi for many companies. As many companies have had their operating budgets reduced, the time has come to re-think how to operate a business. Specifically, is it possible to continue serving one's customer base on a reduced budget?

The answer is a resounding yes. The key to successful continuation of one's business operations requires re-featuring, not actual cost cutting. Understanding what the customer really wants and what can be done without is the best way to re-feature. This will allow the business owner to provide the goods or service while lowering costs at the same time.

A careful evaluation of one's business is crucial. Take the time to carefully evaluate which areas of the business should be highlighted, owing to their profitability, and which areas should be downplayed, as they truly don't matter as much to the customer. By reducing or removing non-essential services, improved pricing can be offered to the customer, thus strengthening customer loyalty.

It may be time to evaluate your raw materials. Is it possible to change to less expensive raw materials without compromising quality? Similarly, while few people want to dismiss staff, is your staff being utilized to the optimum? Some services can easily be offered to the public via internet services, thus freeing your human staff for tasks that computers cannot perform.

Rarely is cost cutting an enjoyable task. However, by figuring out the best and most innovative ways to improve your productivity and profitability of existing services, products, and processes, cost cutting is an inevitable positive by-product.

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Innovation and Technology are Top Priorities

Summing up the recent annual conference of Canadian provincial premiers, the nation's provincial leaders called upon the Federal government to bolster innovation and technology. The premiers are in agreement that removal of provincial tax benefits to companies will seriously dampen research and development. Encouraging R&D, both small and large scale, will eventually translate into economic growth through increased jobs and commerce.

The premiers were also in agreement that the country must adopt a new strategy regarding water management and conservation. Water is the country's most important resource. It was agreed that the nation is not doing enough to protect and manage this vital commodity. A bold innovative strategy must be implemented to protect Canada's water.

Pensions for Canadians were another topic discussed at length by the premiers. There is growing concern among the provincial leaders that the majority of Canadians with annual incomes below $100,000 will have insufficient funds to retire. This includes a large number of baby boomers who are approaching retirement age in the near future. However, the premiers lack unilateral agreement on how to solve this problem. Various measures suggested included increased public pensions and tax credits to bolster and encourage personal savings. The provincial finance ministers are compiling various plans and suggestions. The premiers are hoping that the federal government will convene a pension review summit by the end of 2009. This summit would be attended by both federal and provincial representatives, as well as leaders from the banking community and private pension companies.

The premiers' conference also touched upon the topic of unemployment and benefits. However, no concrete recommendations were made and this area of national concern remains in the hands of the federal government.

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An Economy Divided

The global recession has literally divided Canada into two halves – stable economic sectors and slumping sectors.

Canada's service industry has been extremely resilient and has weathered the economic storm surprisingly well. Service industries including finance, insurance, health care, real estate and construction dropped approximately 1 per cent last winter but have since rebounded rather well. Employment in the services sector has been fairly stable as well. Although construction output and jobs had fallen at a somewhat greater rate than other services, these, too, have stabilized and are showing improvement. Sales of existing homes are showing record levels. The service sector's strength is attributed to its self reliance, rather than dependence on external global factors.

On the other hand, Canadian manufacturing is in desperate shape. Its dependence on foreign, rather than domestic, concerns may not portend well for Canadian manufacturers in the hear future. Key production concerns in Canada include base metal mining, aluminum production, and auto and aerospace manufacturing. As foreign buyers continue to reject Canadian made products including cars, planes, metals and other industrial products, shipments and sales have continued to slide to the lowest levels in the last decade. The lion's share of this decline has been felt in Canada's industrial heartland – Ontario and Quebec. Indeed, Canada's manufacturing numbers were far worse than figures released for U.S. industrial production. About 11 per cent of Canada's industrial workers – some 220,000 employees have lost their jobs due to the economic slump.

Despite early signs of global recovery, the strength of the Canadian dollar has made Canadian made products more expensive relative to foreign-produced products. Thus, foreign purchases are being directed to lower priced products.

The current trend in the manufacturing sector is not expected to show signs of improvement until well into 2010.

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Small Business Outlook- The Worst Is Behind US

There was a time when small and medium sized enterprises (SMEs) had a problem with staffing, today it is with customers. Where are the customers? With sales down, SMEs are coming up with creative ways to draw in customers from bundling items for specials of the day, to discounting individual items. Even with the creativity, SMEs are hoping to make a profit.

The state of the economy has SMEs concerned about the year ahead. Consumer spending has weakened. A recent article in the Canadian Business magazine sites a recent poll on the SMEs business outlook for the near future. The poll conducted by the Canadian Federation of Independent Business (CFIB) listed the Business Barometer index for Alberta as 53.2 for May, meaning SMEs in Alberta were slightly more optimistic than pessimistic about the near future. The outlook for the future varied in other provinces with Newfoundland and Labrador having one of the highest Business Barometers at 64.4, Quebec (52.2), and Ontario at 59.9.

The SMEs in Quebec and Ontario are highly dependent upon manufacturing and US trade. British Columbia has been affected by the housing market in the US and the lumber sectors. Optimism amongst SMEs is well below the historical average, however Ted Mallet, the CFIB’s chief economist believes the worst times could be behind business owners, but there is uncertainty when the recovery will begin and how long it will take.

The recovery should likely start in 2012, if not earlier, for Newfoundland and Labrador with the announcement from the government that the Hebron offshore oil project is moving forth. Although operation will be several years down the road (2016- 2018) this announcement has provided a glimmer of hope for SMEs. The project is estimated to create 3500 jobs and to generate approximately$20 billion in royalties over 20 - 25 years. This is obviously good news for businesses in Newfoundland and Labrador, hopefully there will be a similar turn for the rest of the country.

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Canada's Economic Recovery Expected to be Modest, More Job Losses to Come: Flaherty

Canadian Corporate Tax Rates Slide to 25% Floor

Canadian Finance Minister Jim Flaherty says unemployment will rise through 2010 despite some growth in the economy after meeting with the finance ministers of other nations.
Even though the economy is in the process of stabilizing, he and his fellow colleagues expect a continued increase in unemployment, as the labour markets have not improved and they are concerned about the effect on workers.

"We'll start to see stabilization, which we are seeing now, and then a return to economic growth but continuing deterioration in employment," he said.

"We can expect that to happen into 2010, but we're optimistic we will then see the unemployment numbers start to improve."

U.S. payrolls fell in June by 467,000, far more than was expected. Growth was predicted to resume by the fourth quarter but now some think that it may not happen so quickly.

Canadian economists expect Statistics Canada to report another 30,000 jobs to have been lost in June 363,000 jobs have been lost in Canada since October 2008.

Flaherty has in the past warned Canadians that times may continue to be tough however he is also confident that our recovery would be swift and strong, leading most of the industrialized countries.

Recently he has been more conservative in his estimates though, concurring with other finance ministers that recovery will be slow.

"The anticipation is that the recovery will be modest, so that we'll experience some continuing increase in unemployment, but as we move into 2010, we'll start to see modest recovery," he said.

In the January budget, Flaherty predicted a strong rebound from the recession, with GDP growth of 4.3 per cent in 2010, 6.4 per cent in 2011 and 6.1 per cent in 2012, all higher than the private sector's average estimates.

Notably, the finance minister said he believed Canada's low corporate tax regime in comparison to other nations will attract corporations here.

Tim Hortons Inc. (TSX:THI) announced this week that it would relocate its corporate registration back to Canada from the U.S. in order to take advantage of lower taxes. Flaherty thinks other companies will follow suit as Canada's corporate tax rates decrease to the new 25 per cent floor in combined federal and provincial taxes.


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