Telecom activity deals up growth in Canadian economy, Scotiabank finds

Canada is poised to experience solid growth and the telecom sector is a major contributor to the increase, a new study finds. In its latest Provincial Pulse report, the Bank of Nova Scotia predicts expansion in the Canadian economy. Economists Caroline Silsbury and Mary Webb forecast national output to increase by 4.4 per cent in 2000 and 3.2 per cent next year. Exports will be high, while domestic spending should be aided by business investment, new housing starts and renewed consumer confidence. In telecom, Central Canada is the engine. "Ontario is a major participant in the global high-tech surge," the report notes. "Large and small firms are keeping the province at the leading edge of fibre optics and wireless system developments, and substantial new investment is planned." The study predicts Ontario's economy, boosted by all sectors, will grow by three per cent next year. The bank also predicts unemployment in Quebec will drop dramatically and credits growth in the telecom equipment industry with a large part of that. It says the jobless total should fall to eight per cent, the lowest number in over 20 years. It notes that shipments of telecom equipment leapt by 30 per cent during the latter half of the 1990s. The bank also has kind words for the high-tech initiatives unveiled in the provincial government's most recent financial statement (NL, March 27/00). "Quebec's 2000 budget enhances its targetted tax expenditures, with a special focus on diffusing technology." Prince Edward Island can expect an annual growth rate of two per cent, according to Silsbury and Webb. Again a telco comes in for credit. "A recent four-year agreement between the provincial government and three private sector firms, including the information technology subsidiaries of GE Capital and Aliant ... provides a basis for further development in information-related activity. The objective is an IT centre providing information and network management services to the provincial government and private industry." Growth in New Brunswick is projected to be 2.5 per cent over the next two years. For years the provincial economy has been abetted by the large number of call centres. A bilingual work force and an infrastructure of high-tech communications have proven to be attractive to companies. A major new call centre is slated to open this year. Similar moves are taking place in Manitoba. "Call centre activity is expanding, with the latest start-up planned for Selkirk," the study reports. "Manitoba Telecom, as it streamlines its traditional telephone services, is broadening its participation in other communications areas." Even British Columbia, which has been buffeted by a slumping economy, should see an upturn. The province's ties to Asia and the U.S. are expected to boost exports, although weak domestic spending will hold growth in the next two years to under three per cent. "High-tech manufacturing and services, though still a relatively small share of the economy, should continue to post impressive growth, spurred by closer ties to U.S. markets and financing," the report states.

Telecom activity deals up growth in Canadian economy, Scotiabank finds

News | 04/10/2000 4:00 am EDT

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