09-15-2013 11:03 AM
Mark Carney, as governor of the Bank of Canada, used to urge Canadians to export their way to greater prosperity, especially by selling more to emerging markets, particularly China and India.
Prime Minister Stephen Harper seemed to agree. His government launched trade negotiations, or floated the idea of trade negotiations, in various parts of the world.
None of these talks has yet succeeded, and in most cases, it’s doubtful they ever will. Negotiations with the European Union are stalemated. Talks with India are going nowhere. And the Trans-Pacific Partnership with the United States and many Pacific countries is complicated, particularly given Japan’s recent decision to join the talks. Meanwhile, whatever hopes there are for a sturdier recovery for the Canadian economy rest with that old standby – the U.S. economy.
Despite all this trade talk, the sad fact is that Canada now has a billion-dollar trade deficit. Throw in services and a chronic travel deficit, and Canada is running a current account deficit of about 3 per cent of gross domestic product, higher than any country in the G8, including the United States and Britain.
Canadians in general, and the Harper government in particular, have given themselves repeated pats on the back for weathering the 2008 recession and its aftermath better than any country. This narrative has become a fixture in government speechifying. The Prime Minister repeated it in a mild form at last week’s G20 summit. The narrative plays to the country’s self-esteem and therefore represents an excellent political message.
Canada’s strong fiscal situation, created by the governments of Jean Chrétien and Paul Martin, certainly helped when the financial meltdown arrived. So bad were the fiscal imbalances of the United States and European countries (except Germany) that Canada did indeed compare favourably, and still does (again, except for Germany).
We are five years from that recession now, and unemployment in Canada has been above 7 per cent since 2008. Yet strangely, there is little hue and cry about this new normal, which includes a youth jobless rate of more than 14 per cent.
In the past half-year, job creation has been about 12,000 per month, compared to 29,000 a month for the previous half-year. That lower rate reflects the overall sluggishness of economic growth.
The government’s mantra remains that it is focused on “jobs and the economy,” while other parties chase marginal issues such as legalization of marijuana and Senate abolition. The Conservatives are right about the marginality of the issues being talked up by their opponents. But if the government is indeed fixated on “jobs and the economy,” statistics show that a large gap remains between bragging and reality.
All the provinces, save Saskatchewan, remain in deficit. So does the federal government, although it appears to be heading toward a balanced budget in time for the 2015 election, an accomplishment the Conservatives will highlight during the campaign.
Economic growth remains below 2 per cent, not enough to make a dent in the unemployment rate. Next year looks somewhat better, courtesy of a recovery of sorts in the United States, the train that still pulls along the Canadian economy. But it’s hard to see unemployment ducking below 7 per cent for quite a while.
Quick growth isn’t going to come from trading with emerging markets, most of which have slowed down. It won’t come from trade deals, since even if they happen, they won’t produce results until years down the road.
Domestic demand will remain sluggish, with some of that demand built on debt, as in the housing market. Pumping more bitumen to other places is fraught with uncertainties, and it will take many years for a pipeline to be ready to pump crude from the west to Quebec and New Brunswick. As for the “ring of fire” metal deposits in Northern Ontario, these will be snarled in aboriginal claims and politics for many years.
Five years after that brutal recession, Canada remains fiscally weaker, saddled with a much higher rate of unemployment, a slower growth rate, trade and current account deficits, sputtering or failing trade negotiations, an aging population, uncertain energy exports – but a lot of political bragging about how wonderfully we are performing.
09-15-2013 03:01 PM
Our government like many other governments are all playing a shell game made up of misinformation and lies.
Employment goes up and down but most of the jobs that rise and fall are low paying jobs with no real future. What keeps many people above water is easy debt courtesy of the banks. As has been said before........the rich get richer the poor get poorer and the once middle class, with a future, is disintegrating every year.
Out exports could bring Canada back to life but we have no real exports except natural resources and that is robbing our land and our future. We in Canada and the US have become consumers and not manufacturers. Just to make matters worse......we have taught other countries the art of manufacturing and they have taken over production in many areas. Then we have our own citizens who own companies and they send their manufacturing down south or off shore and take away from both our export business and the possibility of employment for our own people. To me that is tantamount to being a traitor.
These 'trade deals' only open the door to more imports and give us little long term. Free Trade was a scam for the benefit of business and never really did much to help our country. I personally believe we are still and will for a long time suffer the consequences of that deal.
I'm personally tired of the government shell game of statistics.........I go by the people I talk to say and what I hear is .......they need better jobs and some are in debt up to their ears. Meanwhile the rich get richer.
10-02-2013 06:29 PM
Our growth rate and employment opportunities are no worse than any developed nation because of technological advances and business learning to reign in spending because of the economic crash. That being said, as much as I dislike Harper, no government can force business to hire, pay well and make the work fulltime. I have seen it with my own hiring practices as dictated by the corporate office and low wages are here to stay because technology is more efficient and better for the bottom line.
I do not agree, however, that our debt or deficit is near the problem of any G8 or G20 country as the one thing our finance minister has done is set an attainable goal for a balanced budget and in fact a positive for government revenue. The biggest problem any nation is going to have is the spiraling g costs of health care because of such a huge influx of elderly people needing more intensive and specialized treatment. Many nations are doing quite well controlling their spending but a better job could be done by funding the essentials and ridding programs of waste and cost overrides. To say Canada is so bad, means ignoring the insanity South of the border and their lack of knowledge as to how their actions will not only hurt Canada but the rest of the world as well.
We are by no means the best, but ewe have a much brighter forecast than anyone else and if business would loosen the purse strings and become more innovative and expand our economic base from dependency on natural resources, we would be the shining star in a rather dark global community. Look no further than Brazil, India and China that have seen their positive growth also be hindered and it is easy to see that things are not going to change for some time. I wish the wealthy would take the words they speak and start realizing that investment is how money is made and that human investment is the lifeline to economic growth.
10-02-2013 07:46 PM
You cannot have open global trade with such huge wage disparity and domestic jobs at the same time, it's against logic. You need to loosen at least one of those factors. You cannot really close the trade because since we import more than export, we need them more than they need us. What's left then ?
I personally think minimum wage should dismantled, let people regulate themselves how much are they willing to work for. If someone is willing to work for $5/hr, or even for food and board, it's their own darn business.
10-03-2013 07:23 AM
expand our economic base from dependency on natural resources
Unfortunately, the Canadian government has led the way in dependency on natural resources.
10-06-2013 06:50 PM
You cannot have open global trade with such huge wage disparity and domestic jobs at the same time, it's against logic. You need to loosen at least one of those factors. You cannot really close the trade because since we import more than export, we need them more than they need us. What's left then ?
I personally think minimum wage should dismantled, let people regulate themselves how much are they willing to work for. If someone is willing to work for $5/hr, or even for food and board, it's their own darn business.
This particular idea would be the worst thing that could ever happen to our economy.
On the other hand, if we were to raise the minimum wage here to, say, $20+ an hour and outlaw unpaid interns and foreign workers, that would be the best thing that could ever happen to the Canadian economy. You wouldn't even have to do anything else. The economy would flourish because you wouldn't be able to do business simply on the basis of bogus Mcjobs - you would actually have to have a real and valid product.