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Page 4 THE HERALD OUTLOOK Saturda Septembers 1989 the HERALD is published each TON 111 I Home Newspaper of Ha I ton Hills A Division of Canadian Newspapers I milled t Ontario I lass red Number Is an economic slowdown inevitable 8772201 A recent spate of surprising economic numbers has made forecasters heads spin Do the numbers point to sustained boom or imminent Given the strength of S and Canadian consumer spending in he second quarter man economists sa the threat of reces sion is past John Grant chief economist at Wood Gund Ltd disagrees He believes recession in Canada and the United States will send interest rates tumbling soon Dr Grant has a good track record Indeed last he topped the list of forecasters kept b the Financial Times of Canada b be right 8 per cent of the time not bad for an economist The economic numbers are curious South of the border the Americans have revised second quarter growth to a respectable 2 per cent annual rate from the 1 7 per cent estimated last month In the words of one forecaster We have had almost a total rewriting of history S grow th has buoyed by strong consumer spending a trend that was mirrored in Canada Despite the good news Dr Grant is sticking to his guns I m unrepentant he said I still think a slowdown is in the train He points to the recent shrinking of the S monej supply as a sign hat growth is slowing This is a storm that has been brewing for a long time it has not vet broken over the In Canada second quarter numbers released Thursdav ere dramatic A worsening trade tion sw elled the current account deficit to a historic high of 5 billion The current account measures trade in goods and ser vices including dividend and pa to foreigner But the weakness did not come from capital flows The merchan dre trade surplus at a mere million shrank to its lowest point since the third quarter of ports surged by three per cent while exports dipped by per cent Even so the managed to grow at a per cent annual rate in the quarter pretty much in line with the American experience The strength came primarily from consumer spending Grant wonders if consumers will come to the rescue of the economv in the current quarter sense is that the consumer is not as strong as that number makes him look he cautioned Employment growth is slowing and the poor trade numbers will take their toll on jobs and income RATE OUTLOOK Looking through the apparently strong consumer spending I see evidence of a slowdown coming through now The Bank of Canada should be getting ready to ease If he is right interest rates will begin Dr Grant admits that strong bank borrowing could prove him wrong But much of the money is still going to mortgages an area of demand that should be spent before long given the slowdown in the housing market Berrys World IS by Y Aren t you PUBLISHER DawdA EDITOR iH Mad tlicl AD MANAGER lit I Him nit tl SPOUTS lunt llflYmilltc I lllllll ill SNAFU Bruce Beatlie I never got around to transplanting it to a larger pot Auditor scrutinizes Nova Scotia fund Vic Parsons Ottawa Bureau It too bad there aren t more federal and provincial bureaucrats like Auditor General Ken Dye Lately Dye has been taking a lot of heat from Nova Scotia politi dans who resent the federal auditor questioning the way the province has spent more than half of the Canada Nova Scotia Development Fund The fund was intended for offshore oil and gas development Dye questions whether some highway and construction a passenger ferry in Halifax bor some vocational training and a computerized traffic light system in Halifax Dartmouth have any relevance to the fund s stated purpose The reaction by borne ruling Tories Nova Scotia has been downright nasty In committee hearings they made personal at tacks on Dye integrity accused him of being a publicity hound and charged that hes acted in consort with their political opponents To his credit Dye has responded with dignity Police people dont say that The fact is whether Nova Scotia cabinet ministers like it or not Dye is merety doing his job Indeed if he did not raise questions about the spending he might well have been open to the charge of being derelict in his duty As lor allegations of partisan ship these can be dismissed as ab surd Dye was at least as tough on Pierre Liberals as he has been on Tones You can be sure that if the Liberals New Democrats or the Young Nin compoop Party held power in Nova Scotia his criticisms would have been the same Moreoever Dye also conducted an audit of the CanadaNewfoundland Offshore Development Fund while doing his Nova Scotia work He found that in Newfoundland which also had a Conservative government at the time in most cases the types of projects being financed seem to be related to offshore oil and gas development Dyes job is to provide audit in formation to MPs so they can scrutinize government programs and spending He is given free rein to bnng to the attention of the Com anything that the auditor general considers to be cant Lets examine the Nova Scotia fund which is financed entirely from the federal treasury In November ministers from both levels of government signed an agreement on the fund Treasury Board guidelines said projects to be funded must be for infrastructure costs related to oil and gas activities in the offshore They also said the provincial minister had to submit projects to his federal counterpart describing proposals outlining the need and relating it to the selection stan dards Ottawa was given authority to do its own audits of the fund and the federal minister was required to present an annual report to Parliament As cash began to flow into dubious projects some federal of got nervous They were well aware fur would fly if Dye got wind of the kinds of things that were be ing funded Sure enough the boondoggling was discovered And perhaps it is embarrassment that has led to the bitter counter attack by Nova Scotia Tories and their provincial auditor Paul Cormier who says Dye should mind his own business Taxpayers can expect more con frontations of this type in future involving other provinces In his last annual report Dye made clear his view that greater scrutiny of in tergovernmental funding is war ranted About half the contents of the average Canadian purse and wallet finds its way into these government treasuries he said Whether this money is spent at the federal provincial or local levels the taxpayer deserves to know that it is spent with due regard for economy efficiency and effectiveness We in the public sec tor should be able to provide that assurance ADVRItTISINCSAIfS raig Teeter 1KOIHK Dave Hastings Annie les UK HI DhPAKTMh NT Marie Pitt SSKOOM I- OKI- MAN PHI- ASSISTANT How to cut carbon dioxide emissions That was a remarkable display of common sense from Canada assembled energy ministers last week Meeting here they concluded more study had to be done on the social and economic impact of cut ting carbon dioxide emissions before theyd commit themselves to it Carbon dioxide of course is one of the current bugbears of the en lobby up there with PCBs and Alaska oil in the race for Great Satan The prime man made source of carbon dioxide other than breathing is fossilfuel processing and fuel used for transportation and industry The gas is widely believed to be the prime agent in warming up the earth the dreaded greenhouse As a Globe and Mail reporter put it his story about the energy ministers meeting Scientists have measured the pollution building up in the atmosphere They know how those pollutants warm the earth by trapping heat that would otherwise radiate back into space They believe but cannot yet prove that as those pollutants known as greenhouse gases ac cumulate in the atmosphere they are now or soon will be turning up the thermostat on Earth One result of this furor was an in ternatlonal conference held in Toronto a year ago chaired by former Ontario leader and UN ambassador Stephen Lewis that called on alt countries to cut their dioxide emissions by per 2005 to try to stave off what were said to be the consequences of warming in eluding shrinking ice caps spreading deserts and rising seas So why are the energy ministers so cautious Publicly they said its because they foresee major economic pacts on the fossilfuel dependent economies of the Mantimes and western Canada But one hopes that privately they went a step further and posed some fundamental queries There are two questions that should precede any action to cur tail carbon dioxide emissions first does global warming really exist Second if does does it mean anything BOTH WAYS Almost 20 years ago I did a series of interviews on whether the Earth was warnrng or cooling The conclusion from the experts than was that there were pointers both ways Ones of doom from Lewis Energy Probe and their ilk aside nothing has changed Its true there has been a 20per cent rise in the amount of carbon dioxide in the atmosphere over the past 135 years and that the 1980s have been abnormally warm But there was actually a cooling period between the 1940s and when I wrote my article In