Sat, Aug 23, 2003 - Page 6 News List

`Annus horribilis' takes its toll on a battered Canada

ILL WIND For Canadians, SARS and mad cow disease were just the beginning of the hard luck and bad news which may have them yearning for former quiet times


Canada is often seen by outsiders as a rather boring place, populated by polite people, where little ever happens -- much to the irritation of Canadians.

After a year of headline-grabbing troubles, Canadians may be longing for those quiet times.

The country has been bruised by the multiple hit of SARS, a case of mad cow disease, massive forest fires and, most recently, a blackout that hit its industrial heartland.

"It seems to be a litany of adversity," said Max Foran, a University of Calgary culture professor. "In terms of one single year where it's just been bang, bang, bang -- such a varied sequence of events -- I can't think of one [like it.]"

The SARS outbreak killed 44 people in the Toronto area, the only place outside Asia to report deaths from the virus. It prompted a rare travel warning from the World Health Organization and cost the local economy dearly.

Then a single mad cow disease, detected in Alberta in May, sent shock waves through the food industry as many countries banned imports of Canadian beef and cattle.

Just as the country overcame those setbacks, Ontario was hit by the massive power outage last week that hit large areas of eastern North America. About 10 million people in the province were left without power, hitting production in the country's economic engine.

"It's like the fourth or the fifth plague now," said Benjamin Tal, senior economist at CIBC World Markets. "It's just bad luck."

In addition, British Columbia is suffering one of its worth forest fire seasons in decades with about 3,500 fire fighters, battling the more than 800 fires in the western province.

Most of the large fires are believed to have been started by lightning, but a nearly 24,000-hectare blaze north of Kamloops that has been burning since late July was sparked by a discarded cigarette butt.

"We've had a bit of a triple hit in Canada," Finance Minister John Manley told reporters. "The economy has proven to be quite resilient, given what happened to it.

"If we'd faced SARS and a rapidly escalating exchange rate 10 years ago, we'd have been really sunk, whereas this time we're continuing to show reasonable strength," Manley said.

The troubles have taken an economic toll on a country that just last year handily led the Group of Seven rich-nations.

Canada is still the only G7 country with a budget surplus, but its economy has slowed significantly this year -- also because of the global downturn, and from a strengthening currency that has made its exports more costly.

Meanwhile the Bank of Canada, busy hiking interest rates for the better part of a year when other central banks were cutting them, fell in line with the global trend last month. It is widely seen lowering rates again next month.

"The emphasis is on `was.' Canada was outperforming, not any more," Tal said. "We are not going to outperform, in fact we're going to underperform many economies in the G7."

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