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Economic problems in the United States and in Canadian financial markets continue to cast shadows over the Canadian economy. The December 2007 issue of the Economic Climate for Bargaining traces the origin of these financial market problems and outlines policies that should be taken to reduce the damage in Canada. It also includes a summary and analysis of the municipal infrastructure deficit and a report on a corrosive two-tier wage system adopted in the U.S. auto industry - as well as brief analyses of recent economic, employment, inflation and wage trends.