One in five Canadians are born abroad, survey shows

By Randall Palmer

OTTAWA (Reuters) - Canada is more than ever a nation of immigrants, with one in five Canadians born outside the country, according to a 2011 survey released by Statistics Canada on Wednesday.

That 20.6 percent proportion of people born abroad, up from 19.8 percent five years previously, is far bigger than in most other rich industrialized countries.

Statscan said 12.9 percent of U.S. residents were born outside the country, and 11.5 percent of people in Britain. Australia's rate is higher, at 26.8 percent.

But the federal agency also admitted that it was "difficult to anticipate the quality level of the final outcome" of its survey after changes were made in the way it sought information.

In the past, Statscan sent a mandatory long-form census to 20 percent of the population. But the Conservative government abandoned that approach in favor of a voluntary national household survey, which went to one in three Canadians.

Statistics Canada assumed only 50 percent of those who got the survey would respond to a voluntary questionnaire, while the mandatory form had a much higher response rate.

The government argued the mandatory long census was too intrusive, and its decision prompted the resignation in 2010 of Statistics Canada's chief statistician, who said the decision could endanger the survey's usefulness. Business groups and social activists also said Statistics Canada needed the fuller information of the long-form census so it could assist them with planning and funding.

Canada, with a population of 32.9 million in 2011, aims to take in about 250,000 immigrants each year, partly because of a low birth rate among its citizens. Immigration brought in 1.2 million people between 2006 and 2011, and a total of 6.8 million people in Canada were born outside the country.

Almost 57 percent of the immigrants in the 2006-11 period came from Asia, with the Philippines topping the list, followed by China and India.

The survey also shows that the number of Muslims in Canada is rising strongly, while fewer people identify themselves as Christian and more say they have no religious affiliation.

The number of Christians fell to 67.3 percent of the population in 2011 from 77.1 percent in 2001, while the number with no religious affiliation rose to 7.9 million from 4.9 million in 2001.

The Muslim population nearly doubled during the decade to 1.05 million. Muslims now make up 3.2 percent of the population, up from 2.0 percent in 2001.

(Editing by Peter Galloway)

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Analysis: Canadians losing faith in economic "miracle"

By Louise Egan and Andrea Hopkins

OTTAWA/TORONTO (Reuters) - Factory worker Nelson Claros has little time for talk of the Canadian economic miracle.

The 50-year-old was laid off last year from his job of 22 years at a bus-assembly plant northwest of Toronto, and has since applied for 130 jobs. His best offer: A job at $12 an hour, half his previous wage and not enough to pay his bills.

"Really there is a recession right now. They don't call it a recession, but the companies are closing, there are a lot of layoffs. How can this be a miracle economy?" he asked.

It wasn't supposed to be like this. Canada's recovery from a mild 2008-09 recession was quick and job-filled, and the country added nearly 900,000 jobs to take the jobless rate to 7.2 percent from 8.7 percent at the depths of the downturn.

No bank needed a government bailout, the housing market did not collapse and Finance Minister Jim Flaherty repeatedly boasted about how Canada was outperforming its partners in the Group of Seven rich industrialized economies.

But recent growth has consistently fallen short of expectations and a very rough patch late last year turned disappointment into dread. Economists had been betting on a quicker U.S. recovery to boost Canadian exports, as well as a pickup in business spending.

The slowdown could spell trouble for the Conservative government of Prime Minister Stephen Harper, which is showing signs of mid-term stress and losing ground in opinion polls to the third largest party, the Liberals.

Policy makers predict a brighter second half of 2013, but people like Claros and business leaders are not so sure.

"I don't see any solution for the problem of people who are laid off right now," said Claros, a single father of four, who is living off his severance pay and is waiting for the 31 weeks of unemployment insurance he is eligible for.

Some 54,000 Canadians joined Claros in the ranks of the unemployed in March, the worst monthly job losses in more than four years.

Previous engines of growth - housing and consumer spending - are slowing, and businesses are shying away from investments.

And with the government striving to balance its budget and the Bank of Canada talking of rate hikes rather than cuts, official stimulus programs are off the table, at least for now, leaving resource-rich Canada hitching its economic star to uncertain hopes of a strong energy sector and a U.S. recovery.

Harper wants Canadians to look at the bigger picture and not draw gloomy conclusions from the latest data.

"We can expect we're going to have good months and bad months in terms of numbers. The trendlines remain generally positive," he told reporters in Calgary on Thursday.

Still, Canadian growth is set to weaken for the fourth straight year in 2013 and trail the U.S. performance for a second year. But at a forecast 1.6 percent, it will likely surpass the euro zone countries and Japan by a wide margin.

LOWERING EXPECTATIONS

The labor market is far healthier than that of the United States, but job growth has lagged population growth, making the recovery incomplete. There are 1.4 million unemployed Canadians competing for jobs compared to 1.1 million prior to the crisis.

Alysa Golden, an unemployed social worker with 20 years of experience, said the last online job posting that fit her skills had 1,600 views in the first 24 hours it was posted. The 49-year-old is starting to lower her expectations in terms of salary and interest.

"With two kids, we really need something steady coming in, sooner rather than later."

Wage growth has been decent at 2 percent a year, but experts say nervous consumers won't spend enough to provide a significant boost to the economy, especially as households have a record C$1.65 of debt for every dollar earned.

"I do see things continuing on much as they have, where there will be economic growth, there will be some jobs created, but it won't be enough to significantly reduce unemployment or improve the labor market," said Erin Weir, economist for the United Steelworkers union.

As for housing, most are pleased to see an end to the overheated prices of a year ago. But a slowing housing market is dampening growth and raising fears of a U.S.-style crash.

Dustin Kroft, owner of Rent-a-Son moving company in Toronto, said he has "that sort of pit in your stomach" feeling after seeing an estimated 17 percent fall in sales in March. "It has been a while since I felt that," he said.

The latest figures suggest the housing sector is cooling, not crashing, after the government tightened mortgage rules in mid-2012 to prevent a real estate bubble.

WAR FUNDS

Business investment remains slow and outgoing Bank of Canada Governor Mark Carney wants the private sector to unleash some of what he has called the "dead money" to stimulate the economy.

But companies need to put cash in a "war fund" until better times, said Betty Lou Pacey, founder and chief executive officer of BL Innovative Lighting, a small Vancouver-based business that exports optical fiber for lighting.

She cites the massive U.S. fiscal deficit as the biggest external threat for exporters, whose sales growth depends on healthy U.S. demand. Her own company has a couple of costly projects "percolating" that would be easier to commit to if circumstances were better.

"You're not going to go hog wild and spend all your money. It would be foolish for a business to do that."

And despite the more bullish mood on energy prices, some oil sands producers are shifting strategy in the face of stiff competition from cheaper-to-produce U.S. domestic oil. Last month, Suncor Energy Inc scrapped plans for a multibillion-dollar Voyageur upgrading plant, saying returns would not meet previous expectations.

Canadian businesses expect to boost capital spending this year by a mere 0.8 percent, the worst rate since 2009, Statistics Canada said in a report earlier this year.

"Our country's little engine is really not very big," said Pacey, referring to the hard-hit manufacturing sector.

"So that little engine is vital to the life of this country and we need some alarm bells going off."

(Additional reporting by Jeffrey Jones and Scott Haggett in Calgary; Writing by Louise Egan; Editing by Janet Guttsman, Martin Howell)

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Canadians in Algeria attack were young, middle class: CBC

By David Ljunggren and Mark Hosenball

OTTAWA/WASHINGTON (Reuters) - Two men from English-speaking Canada who took part in an attack by militants on a gas plant in Algeria in January were in their early twenties and from middle-class backgrounds, the Canadian Broadcasting Corp said on Tuesday in an account that was later confirmed by U.S. government sources.

Around 70 people, including the two Canadians, died when Algerian troops stormed the Tigantourine desert gas plant and ended the siege. The Royal Canadian Mounted Police (RCMP) said last month it had identified two suspects but gave no details.

CBC named the two men as former high school friends Xristos Katsiroubas, 22, and Ali Medlej, described as being about 24. Both came from London, a town in the central Canadian province of Ontario.

The RCMP declined to comment. The Canadian Security Intelligence Service spy agency, which has repeatedly warned of the dangers of radicalized Canadians traveling abroad to cause trouble, did not respond to a request for comment.

But a U.S. government source said U.S. agencies had received information about the Canadian investigation and believed that the CBC report correctly identified the Canadian militants.

Security experts in North America and Europe said that while Canadians traveling abroad to fight with Islamic militants is not a new phenomenon, the fact that men from English-speaking Ontario had joined up with militants in what is traditionally a French-speaking part of Africa was unusual.

U.S. and European counter-terrorism officials have expressed growing concern about the number of English-speaking recruits traveling to dangerous or remote areas in such countries as Pakistan, Syria, Somalia and Yemen to train or fight with militant groups linked to Al Qaeda.

The officials say they worry that such militants will return to their home countries with the motivation and skills to plot attacks.

U.S. officials say they are concerned that militants unknown to Western security agencies can easily enter the United States and carry out attacks. However, they added that the quality and training level of recent recruits - probably including the Canadians killed in the Algeria - had noticeably declined.

CBC cited police sources as saying Katsiroubas, who grew up in a middle-class home with a swimming pool and converted to Islam from the Greek Orthodox faith, was likely the attacker whom survivors described as being blond-haired and speaking fluent "North American English".

CBC said CSIS agents had interviewed family and friends of the two men in 2007. A former friend of the two said a relative had called the police, complaining the pair were "hanging around with weirdos".

CBC also said two former schoolmates of the pair had traveled overseas with Katsiroubas and Medlej. The network cited intelligence sources as saying CSIS did not have the two men and their friends under surveillance when they left Canada last year.

Canadian Foreign Minister John Baird said nations such as the United States, Sweden and Britain were struggling to deal with the same problem.

"Canada is far from the only country that has had to deal with this challenge of radicalization ... my colleagues and I will be discussing the issue in the days and weeks ahead," he said in a conference call from the United Arab Emirates.

Christian Leuprecht, a terrorism expert, said the two men appeared to have become radicalized by themselves rather than having joined a militant cell in Canada.

"Much or all of the activity in which they would have been engaged while in Canada would likely have been perfectly legal. So these cases are difficult to detect, even harder to stop, and harder yet to convict," said Leuprecht, who works at Queen's University in Kingston, Ontario.

CSIS is aware of dozens of Canadians in their early twenties who have traveled or tried to travel overseas to take part in terrorism-related activities, the agency's director told a parliamentary committee in February.

U.S. officials have said that as many as two dozen American citizens or residents have been involved with the Somali-based al Qaeda affiliate al Shabaab. A smaller number of men from Britain, some of Somali extraction but some from other ethnic backgrounds, have also been involved with that group.

British recruits have also traveled to fight or train with militants in post-Gadaffi Libya, but U.S. and European sources say that the Algerian gas plant siege is one of the first cases in which English-speaking militants have fought with a group more solidly based in French-speaking Africa.

The hottest battlefield for would-be Islamic militants today is Syria, where European officials say between 70 and 100 recruits from Britain are fighting with the militant group al Nusrah. Last week, U.S. authorities arrested and charged Eric Harroun, a former U.S. Army soldier who had traveled to Syria to fight with al Nusrah.

(Editing by Warren Strobel and Peter Galloway)

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