Carney sees tough recovery ahead

The global economy is recovering from the recession but will be dramatically changed for the worse, and Canadian companies and workers need to prepare for that, says Bank of Canada governor Mark Carney.

In an address Thursday to the Winnipeg Chamber of Commerce, Carney said he's not sure corporations and the labour force are prepared for the changes.

Carney said Canadian companies have fallen behind on their investment in new technology, while Americans have seen a surge in productivity during the recession and are emerging more competitive than ever.

He also predicted that many of the jobs lost in the downturn will never return and that Canada might be heading for a period in which unemployment rates are generally higher than they were in the past. 

"Could Canada experience a jobless recovery?" he asked. "Conflicting forces are at play." 

"A powerful and sustained restructuring of the global economy has begun," he emphasized. "Canadian business will need to develop new markets as the traditional advantage of relatively open access to U.S. markets becomes less valuable."

Carney also said the Bank of Canada is predicting growth this year of 2.9 per cent and 3.5 per cent in 2011.