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ST. JOHN'S, N.L.:  Canada must shift its trade focus towards emerging economies, which account for two thirds of global growth and are key drivers of the worldwide economic recovery, says Bank of Canada Governor Mark Carney.

The head of Canada's central bank said Friday that countries such as China, India and Brazil are growing centres of economic power affecting the price of oil, metals and other commodities that drive Canada's resources economy.

``The relatively slow recovery in our most important trading partner, the United States _ along with ongoing sectoral adjustments _means that Canadian firms have to find new markets,'' Carney told an oil and gas industry conference in St. John's, N.L.

``The global economy is increasingly multi-polar,'' he added. ``Emerging economies currently account for about two-thirds of global growth. They represent almost one-half of the growth in imports over the past decade, particularly for capital goods. They are the main drivers of commodity prices and are therefore important determinants of our terms of trade.

``More fundamentally, they are increasingly leaders in public policy and business. Canada needs to become fully engaged with these emerging centres of economic power.''

Canada's trade with China, India and other parts of Asia has grown in recent years, mainly in grains, fertilizers, coal and other commodities. Chinese companies have also made major investments in Canada's oilsands and mining sector in a bid to secure future supplies of energy and key industrial metals such as copper and zinc.

In his speech to the Newfoundland and Labrador Oil and Gas Industries Association, Carney also predicted the global recovery will be rocky. In the absence of real exchange rate changes and higher domestic demand elsewhere, there could be a shortfall of up to $7 trillion in worldwide GDP by 2015, he said.

He called it a looming ``age of austerity.''

``The global economic recovery is proceeding, but it is increasingly uneven across countries. There is strong momentum in emerging-market economies; some consolidation of the recoveries in the United States, Japan, and other industrialized economies; and the possibility of renewed weakness in Europe.''

Carney also said global growth ahead will be more commodity intensive because emerging-market economies' share of global growth is now two-thirds, rather than the one-half it was a decade ago. In a spring forecast, the Bank of Canada projected an additional 30 per cent increase in the prices of non-energy commodities over the next few years.

That's good news for Canadian resources companies, he said, but there are still major challenges ahead for corporate Canada, including a need to grow productivity and technology investments to become more competitive in the global market.

``The imperatives for Canadian businesses appear clear. New suppliers need to be sourced; new markets opened; a new approach to managing for a more volatile environment developed.

``Fortune favours the bold,'' Carney said, quoting Virgil.

``Canadian business needs to step up. Productivity growth fell in the latest recession _ the first time that's happened in three decades. Despite the availability of capital, strong balance sheets and improving economic conditions, business investment has been subdued compared with the past downturns and the scale of the challenge we face.''

Investment intentions for 2010 across the country are ``modest and are largely driven by the public sector.

``This needs to change for a more balanced recovery and a more competitive economy.''

Carney stressed that Newfoundland and Labrador, a rugged windswept island that breeds boldness in its people, is an exception.

``Major capital investments over the next couple of years in mining, public infrastructure and oil and gas will all but guarantee a few years of very strong growth. We would all do well to follow your example.''

Those words sat well with Bob Cadigan, president and chief executive officer of the Newfoundland Oil and Gas Industries Association.

``We've been through much of the austerity that many developed countries are going to have to face in terms of recovery from the past financial crisis,'' he said in an interview.

``We've done a lot of things in the last 10 or 15 years that probably positioned us reasonably well as we entered the recession. Luckily we're blessed with oil and gas resources, iron ore and other resources. As economies start to move, we'll need (them) to continue the growth.''

Offshore oil production since 1997 has had an overall rags-to-riches impact on the province. Related cash now accounts for one-third of provincial revenues.

``We do have, in terms of our offshore industry, a very productive workforce _ a very productive industry in general,'' Cadigan said.

Three offshore oil sites operate about 300 kilometres east of St. John's. And Chevron is drilling Canada's deepest-ever exploratory well slightly north of those locations at a depth of 2,600 metres.

``Those, with other developments offshore, should keep Newfoundland and Labrador in a leadership position in the Canadian economy,'' Cadigan said.