Canadian economic overview - May 30, 2006

General: Despite a strengthening currency, the Canadian economy is moving along very nicely. However, unemployment is low by Canadian standards, causing labor shortages in some areas. The booming western part of Canada is especially affected by this. The government has lowered the fees that potential immigrants have to pay. The recently introduced federal budget contained 29 different tax breaks. This budget was the eighth one in a row that was balanced. GDP: + 0.2 percent in February Consumer Price Index: + 2.4 percent annual rate in April, which is steady from a year ago Producer Prices: + 1.1 percent in March compared to a year ago Wages: + 0.8 percent in February (2.8 percent a year ago) Industrial Production: + 1.4 percent in February (compared to a year ago) Retail Sales: + 3.0 percent in February compared to a year ago Unemployment: 6.4 percent in April (6.8 percent a year ago) Trade Balance: $59.7 billion in March (for latest 12 months) Currency: CA$1.12 per US$1 as of May 17 (CA$1.26 per US$1 a year ago). Special Focus: Canada and the US have finally settled the long lasting trade dispute over softwood lumber. But at what price for Canada? It agreed that its US market share will not exceed 34 percent. The Canadian government also agreed to impose export taxes on softwood lumber and to limit shipments if prices in the US dip below their current high level. And we thought that the “F “ and “T” in NAFTA stood for Free Trade . . .