Evening star., 1949-07-03
Prosperity
Is Growing
ForCanada
May Be Approaching
Record Economic
Expansion
Bv Froncis Williams
By Froncis Williams

dustries remarkably free from the
recession anxieties which now face
American business, Canada is now,
in the view of many of her lead
ing industrialists, bankers and
economists, on the eve OF what
may prove the greatest economic
expansion in her history. This
confidence is shared also by ex-
perts in the principal economic
departments of the government.
Traditionally the c "a na d "a n
economy follows the same general
course as the American on a some
what lower level and with a time
lag normally of three or four
months, so that a recession in the
United States is followed by
Canadian business decline that
much later. This time that has
not happened. On the contrary
although falling prices and rising
unemployment have been features
of the American situation during
the whole of the current year and
the trend there. although still far
from nearing slump level, shows
no sign of ending, Canada is still
enjoying record prosperity.
Generally Confident
This prosperity runs through
out almost the entire industrial
system, and although some east
ern farming communities have
suffered loss through drought, and
agricultural output, particularly
fruit and dairy produce, is likely
to be below normal, the farming
community generally is probably
in better economic shape than
ever before. Both wholesale and
retail prices of the principal man
ufacturing products have been
kept remarkably stable, employ
ment is high and the rate both
of production and of capital in
vestment in new industrial enter
prises, public works and housing
which account for 20 per cent OF
the totals at a record high
level.
Although some industrialists and
economists are anxious about the
immediate future and fear some
recession later in the year. the
general attitude of businessmen
bankers and heads of the eco
nomic department of the Gov
ernment with whom this writer
discussed the outlook at length is
one of confidence that Canada is
on the eve of further record ex-
pansion.
Oil Prospects Good
This confidence arises in large
part from the remarkable pros
poets opened up by the new oil
developments in Alberta, where
the greatest search for oil that
Canada has ever experienced Is
now taking place with results
which so far suggest that the new
field may prove one of the great
est oil producers in the world. But
oil, although most important, Is
not the only source of new wealth
New iron ore deposits in Labrador
large titanium resources in Que.
bee which some experts think may
eventually provide as rich a con.
tribution to the Canadian econ.
omy as nickel has done, new base
metal discoveries on the shores OF
the Great Slave Lake in the
Northwest Territory, and the
search for uranium now being
carried out both by private ano
government prospectors. all pro-
vide a solid basis for the remark
able optimism which one finds
everywhere.
Many of these developments lie
of course, in the future. though ir
the case of oil that future is moi
far ahead. Meanwhile, even apart
from these developments which
may dramatically alter Canada's
economic outlook, there are
grounds for solid optimism in the
way Canada's economy is stand
ing up to the postwar strains and
has managed to free itself from
traditional dependence on Amer
lean trends.
Government Plans Well
The current level of prosperity
and stability appears to be due to
q number of causes among which,
paradoxically, the import restric-
tions taken to meet American dol
lar exchange difficulties last year
have played an important part.
To a significant extent so far they
have had the effect of insulating
the Canadian market from the
oversaturation and subsequent
price declines which are features
of the current American problem.
Domestic demands are still high
and apparently stable. What ap-
pears to have been highly intelli-
gent government financial plan
ming has also had a large place.
Thus substantial tax reductions
in the last budget. although they
may we'll have been largely politi-
cally inspired in preparation for
the general election, have in the
outcome provided just the stim-
ulus needed to keep up both con-
sumer buying and capital invest
ment.
Canada indeed has moved more
rapidly and efficiently than per-
haps any other country from the
first postwar phase of anti-inf1a-
ton measures to a new phase o1
anti-def1ation strategy and so fal
has been expert in timing. The
result is that for the time being
at any rate-and probably, If OF
and other expectations prove jus.
titled, for a very long time aheac
Canada presents a remarkable
oasis of economic stability in ar
internationally unstable situation
Which means also that she is now
and will probably remain an ex-
panding market for British and