IMF says Canadian economy coping well with oil price shock, but effect still unfolding

The International Monetary Fund says Canada has coped well so far since the oil price shock, but warns the impact of the fall in crude prices will be felt for some time.

The IMF says the downturn has renewed concern about high household debt levels in Canada and the growing disparity between housing markets in high-priced areas such as Vancouver and Toronto compared with other regions.

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It says the Bank of Canada's policy of low interest rates and the federal government's plan to increase infrastructure spending are appropriate, given the need to support economic growth.

But the Washington-based intergovernmental agency also says the time is right for a renewed push to improve Canada's productivity, which has lagged behind its peers.

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It says a higher participation rate by women in the labour force would have a strong impact on productivity growth and it recommends that the new Canada child benefit take a more targeted approach to provide subsidies to working parents.

The IMF makes the comments in an annual analysis of the Canadian economy that was released today.