In this issue - November 17, 2011

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Economy growing at gradual pace says
top economist Craig Alexander at
Mississauga Board of Trade event

Mississauga's business community gained valuable insight into the current economic environment as Mississauga Board of Trade welcomed Craig Alexander, Chief Economist with TD Financial Group, to the third annual Economic Outlook Breakfast on Thursday, November 3, 2011.

Surpassing expectations, this sold-out event was held at Mississauga Convention Centre, and was sponsored by TD Commercial Banking and Business Development Bank of Canada (BDC). After a brief introduction by TD's District Vice-President, Mississauga Branch, Dero Sabatini, Craig began his presentation. He first commented on the global recession and recovery, and then focused on the U.S., ending his remarks with his thoughts on Canada's economy.

Alexander spoke to the fiscal crisis in Europe, mentioning that it was, "not simple stories to tell." He went on to speak about the dire financial situation currently plaguing Greece, a possible bailout and the European Financial Stability Facility (EFSF).

"Greece cannot pay their bills or depreciate their currency," said Alexander. "They (Greece) are caught in a vicious downfall and will have to default approximately 71% of their debt." He also stated it is difficult to predict what will happen in Greece in the future.

After speaking on the world economy and leading emerging markets following the recession, he then commented on the U.S. and Canada, specifically touching on issues with growth and the unique recovery process we are facing.

Alexander spoke about the current state of the United States Government. "The problem is not the U.S. deficit; it's the projection of where the country will be in the next few years if they don't take action."

Predicting that the U.S. economy will grow at a gradual pace, Alexander shared his thoughts on the impact businesses will face, as the economy picks up.

He then mentioned his largest concern, the U.S. housing market. Sales are slowly rising but the real problem is supply. "Home prices are falling but due to the high number of U.S. residents defaulting on mortgages, they are riskier to give out, which impairs willingness to lend."

Alexander discussed the future growth of the economy, saying that, "it will grow at a moderate pace, similar to last year." He also touched on the Canadian exports tied to the U.S., stating that the Canadian dollar could fall, but in five years, currency could be at par.

Stating that Canadian governments are turning their attention to deficit fighting, Alexander added that, "Canada is not adding to the economy/growth, but won't see a drag like the U.S. or Europe."

Wrapping up his speech, Alexander touched on some key take away points: the European fiscal crisis is not resolved, U.S. is facing fiscal challenges, inflation is becoming a risk in developing nations and, the economic recovery is advanced nations is very fragile.

"How do businesses deal with this environment? Don't let it paralyze you; you cannot base your plans off of the U.S. or Europe."

Some other points included: 

• U.S. recovery spending halt
• Fractured state of Republican Party in U.S.
• European fiscal crisis problems
• Fragility of U.S. economy and housing market
• Comparison between U.S. and Japanese economies 

Members and guests were then encouraged to ask questions and share concerns. Some topics included: the standard of living in China, possible export opportunities and the likelihood of a political shift in the U.S.