国际英语新闻：Canadian government acts to boost sluggish economy

OTTAWA, Sept. 30 (Xinhua) -- Canada's finance minister has scaled back a scheduled tax increase to try to return Canada to the high post-recession growth rates that have shown signs of stagnation in recent months.

Thursday's announcement of a drastic cutback in the planned increase of workers'and employers'unemployment insurance payroll taxes came on the same day that the national statistics office showed the Canadian economy shrank in July for the first time in nearly a year.

A Statistics Canada report published Thursday said real gross domestic product fell 0.1 percent in July, which represents the first monthly decline since August 2009 following a relatively strong recovery from the recession.

The nation's manufacturing, retail, wholesale trade, construction and forestry industries all posted declines. Mining increased by 1.1 percent.

In manufacturing, GDP fell 0.7 percent in July as 11 of the 21 major groups in that sector retreated. Construction and real estate also saw declines.

Construction declined 0.5 percent as residential building construction fell 2 percent. Resale of homes also dropped. "The home resale market fell significantly for a third consecutive month, which led to an 8-percent decrease in the output of real estate agents and brokers,"Statistics Canada reported. "The output of this industry stood at about two-thirds of its level recorded at the beginning of 2010."

Retail trade fell 0.5 percent in July after a 0.7-percent gain the month before, while forestry and logging receded 4.6 percent.

Just hours after the Statistics Canada report was released, Bank of Canada Governor Mark Carney warned that Canada's economy is showing strong signs of weakening.

He said the Canadian recovery is relatively modest in comparison to its predecessors and has relied heavily on housing and personal consumption, which have been hit hard by recent retail sales tax increases in two of the country's largest provinces.

"The limitations of this reliance are becoming evident," the governor noted. "In recent months, the speed of the recovery has diminished." He said a modest pace of growth can be expected in coming months because Canadian consumers have little more to spend.

At the same time, the United States, which is Canada's largest trading partner, is still in a deep economic downturn and the world economic situation is uncertain, Carney told an audience in the Canada-U.S. border city of Windsor, Ontario.

Carney noted that, with all 400,000 jobs lost in the recession now recovered, the performance of the labor market has been the most striking feature of the Canadian recovery. But, he added, most of the new jobs were created by governments.