(Reuters) - Canada and the world are facing a long and deep recession that will fundamentally alter the nature of capitalism, former Canadian central bank chief David Dodge told the Globe and Mail in an interview.
Recovery “is not going to be as quick as everybody thinks,” Dodge told the paper. “I think anybody would be dreaming in Technicolor to think that you’re going to get through this by the third quarter of this year.”
The Bank of Canada has forecast a fast turnaround for Canada, with growth resuming in the second half of this year and soaring to 3.8 per cent next year, the paper said, adding that downward revisions to that outlook are in the works.
Ottawa expects a healthy recovery that will bring its books back into surplus by 2013, according to the paper.
“They’re not going to do that. It’s totally unrealistic,” Dodge told the paper.
Dodge sees unemployment climbing to above 10 per cent in Canada, as well as a permanent, painful contraction of several mature industries such as automobile production and newsprint, and a sober reassessment of investment in oil sands, the paper said.
Reporting by Ajay Kamalakaran in Bangalore