The Guardian (Charlottetown) - - CANADA -

Toronto (CP) — The Cana­dian econ­omy is in the spotlight to­day with the sink­ing Cana­dian dol­lar and the Par­lia­men­tary Bud­get Of­fice’s de­ter­mi­na­tion that the fed­eral gov­ern­ment is fac­ing a $1-bil­lion deficit.

Five things to know:

The loonie: In late-morn­ing trad­ing, the Cana­dian dol­lar slumped to 76.76 cents US, the low­est level since Septem­ber 2004. The loonie is suf­fer­ing from lower oil and gold prices and the Bank of Canada’s in­ter­est rate cut last week.

Deficit: Num­ber-crunch­ing by the Par­lia­men­tary Bud­get Of­fice projects the fed­eral gov­ern­ment is fac­ing a $1-bil­lion short­fall in 2015-16. In its April bud­get, the fed­eral gov­ern­ment pre­dicted a string of sur­pluses, start­ing with $1.4 bil­lion for this elec­tion year.

Oil: On com­mod­ity mar­kets, the Septem­ber con­tract for crude oil dropped be­low the $50 mark at one point — a kick in the teeth to the loonie, now con­sid­ered a petro-cur­rency.

Re­ces­sion?: The Cana­dian econ­omy con­tracted in the first quar­ter of the year at an an­nu­al­ized rate of 0.6 per cent, fu­elled in part by a slump in non-re­source ex­ports. That plunge is a phe­nom­e­non Bank of Canada gover­nor Stephen Poloz de­scribed as “a puz­zle that war­rants fur­ther study.”

Op­ti­mistic Oliver: Fi­nance Min­is­ter Joe Oliver isn’t con­cerned, how­ever, pre­dict­ing on Tues­day that the econ­omy will re­bound later this year and in­sist­ing the gov­ern­ment will live up to its long-held prom­ise to bal­ance the bud­get this elec­tion year. “We are very com­fort­able, very com­fort­able we’re go­ing to achieve a bud­getary sur­plus this year and new num­bers will be com­ing out fairly soon,” he said.

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