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SOME PARTS OF CANADA ARE SEEING POSITIVE ECONOMIC AFTEREFFECTS

Despite fears of a recession, airline bankruptcies and a tumbling stock market, some areas of the Canadian economy -- including theater and private jets -- are defiantly bucking the downward trend.

On Friday, Bank of Canada Governor David Dodge said the effects of last week's terrorist attacks in the U.S. will likely push the Canadian economy into negative territory for the next six months.

Dodge said economic growth in the third quarter will be "close to zero or slightly negative" and those aftereffect contractions will continue through the end of the year.

As in the U.S., retail sales have been hit by the uncertainty following the attacks and recessionary fears. Consumers have cut back on most purchases and retailers have responded with less advertising.

That mix, said retail analyst Ed Strapagiel, senior vice-president of Toronto's Kubas Consultants, will likely continue through the all-important Christmas shopping season.

"The outlook isn't very good," he said.

While some hotels across Canada are reporting cancellations and a decline in tourist bookings, other parts of Canada have seen some positive aftereffects.

Martha Chapman, corporate communications manager for Signature Vacations, Canada's largest leisure travel agency, expects Canada and Canadian airlines will see some U.S. spillover as a result of domestic fears.

In the period surrounding the 1990 Gulf War, she said, Americans were reluctant to travel very far, and Canada was a good alternate destination. Canadian airlines, she added, also benefited from American perceptions that they were less prone to attack than U.S. carriers.

Chapman has also seen a jump in interest for all-inclusive resorts because they are seen as safer than hotels where "anyone can just walk in off the street."

Daniel Blachut, general manager at Toronto's Crown Plaza Hotel, said he has lost "a month's worth of business" in the past week, as cancellations pour in. But, he hopes that Americans who want to travel will turn to Canada as a safer spot than Europe.

All over the U.S., as corporations begin freezing travel for their employees, Canadian hotels and convention centers are hoping they will eventually gain some spillover business.

Tricia Hosking, spokeswoman for Tourism Toronto, said while there have been some cancellations of trips to the city, they haven't seen any serious downturn in tourist traffic.

"Americans love to travel," she said, and Toronto is within a day's drive of more than half the U.S. population. Indeed, while Broadway is suffering from a dramatic box office decline -- mainly due to the near-disappearance of New York tourists who account for about 40 percent of ticket sales -- Toronto theater is booming.

The third-largest theater city in the English-speaking world -- after London and New York -- Toronto's mainstream theater is doing so well that extra tickets blocks are being sold. After the attendance drop on Sept. 11 and 12, sales went "way back up," said John Karastamatis, communications director for Mirvish Productions.

"We've added 185,000 seats for 'The Lion King' and 150,000 for 'Mama Mia,' " he said.

Those new blocks of tickets, he added, are almost all for visiting Americans who buy between 30 and 60 percent of all theater tickets, depending on the season, with Buffalo representing the largest block of Americans.

Other businesses that have seen a sharp increase in business following the attacks include Montreal companies Bombardier and Skyservice Aviation.

With wealthy individuals and corporations turning to private jets, Skyservice, which charters its fleet of planes and jets, can barely keep up with demand, said company director of sales Peter Bromby. Bombardier spokeswoman Dominique Dionne said they have had a dramatic increase in calls from companies interested in the cost of private jets.

While Canada's major stock market -- the Toronto Stock Exchange -- declined this week, its drop was far less severe than the New York Stock Exchange. For the week, the TSE was off about 330 points to 6,513.

In reaction to the attack, Bob Runciman, Ontario's Minister of Economic Development and Trade, suspended the province's long-running ads aimed at luring businesses from New York and the U.S. Northeast to Ontario.

"He thought they just seemed in bad taste," said Runciman spokesman Hal Vincent.

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