|STEVE MACNAULL/The Okanagan Saturday|
The ballroom at the Ramada Hotel was packed to hear what Jestin had to say about the Canadian and world economy.
"Canada looks good compared to the U.S. and Europe. We're less ugly," the Toronto-based economist told a Kelowna Chamber of Commerce lunch audience at the Ramada Hotel Thursday.
"Canada has slow growth, but it's growth compared to the recession in Europe. And Canada's debt-to-GDP ratio is one per cent. The U.S.'s is eight per cent. Canada also has low
Jestin and other economists are hesitant to make
sweeping predictions because the world has undergone
fundamental change since the 2009-09 recession.
"We don't have cyclical economies anymore," he said.
"We are not going back to the world of pre-2008. In the
future, two-thirds of global growth is coming from emerging markets like China, India and Russia. Gone are the days when the U.S., Japan and Europe drove growth."
While wholesale change is scary, it's also a great
opportunity, according to Jestin.
"With Europe in such crisis, the U.S. is seen as the safe haven for investment," he explained.
"As a result, housing sales, car sales and consumer sales are going up in the U.S. and Americans are starting to travel again. Those are all things Canada can benefit from a lot more than we will be hurt by what's going on in Europe."
Canadian companies should also focus on emerging
markets because those are the countries that are buying our wood, metals, oil and gas, cars and luxury goods to satisfy consumer demand and growth.
Jestin said figuring out a pipeline strategy to get oil and gas to coastal ports for export to China is important for the province's growth prospects.
He also noted Canada's seven per cent unemployment rate is relatively low.
As baby boomers retire and there aren't enough young people to replace them, the country is starting to experience a skilled labour shortage simlar to the one during the boom years 2004-08.
"Again, it's a fundamental dilemma where we do have people without jobs in this country, but we also have jobs
without people," he said.
"To invest in our future the government has to make skills-based training and
education a top priority."
The other two keys to keeping Canada robust are good government fiscal policy (low taxes, a strong banking system, low inflation and low interest rates) and
controlling health care costs.
While low interest rates have certainly been welcomed by homeowners paying down mortgages and loans and by businesses borrowing to fund improvements, growth and hiring, they have been the bane of investors.
"It's bad news not just for investors, but pension plans and even endowments that provide scholarships and bursaries
because it's hard to get good returns in
a low-interest-rate environment,"
"All indications point toward interest rates staying low for a long time, at least
Jestin said although Canada is facing some economic challenges, it is still the best country in the world to live in and it can prosper in the
future by siezing the opportunities that come with fundamental change.