The economic recovery in the U.S. and Europe is likely to be “slow and painful” and will have a “profound” effect on Canada, Toronto-Dominion Bank Chief Executive Officer Edmund Clark said.
“The prolonged period of slow growth expected will have a profound effect on Canada’s recovery and economy,” Clark said last night in Toronto after accepting the 2011 Ivey Business Leader award, according to the text of his speech.
The economic slowdown will lead to a gap between government revenue and expenses, putting more pressure on governments to cut costs, Clark said.
“More importantly, it also risks increasing the structural fiscal deficit as the prolonged period of low growth reduces the growth potential of the economy,” Clark said in his speech at the Four Seasons hotel.
While Canada’s reaction to market pressures was different than the U.S., the country is unlikely to avoid a crisis of “potential broken promises in the future,” Clark said.
“Canada has come though the financial crisis relatively well, and we are rightly proud of this and past efforts that have placed us in good standing,” said Clark. “But looking forward we face many of the same challenges as the western world.”
Toronto-Dominion is Canada’s second-largest bank by assets.