President Barack Obama's re-election represents a moment of major importance for the Canadian economy and for its long-term foreign policy outlook. Thanks to tonight's result south of the border, Canadian leaders now have a four-year long opening in which they can begin to think strategically on both domestic and international affairs.
Without question, Canadian long-term international strategic interests are better served with a Democrat in the White House. Republican sabre-rattling with Russia and China would undermine Canadian attempts to reconcile with Moscow over the Northwest Passage in the Arctic as well as Ottawa's policy of increasing oil exports to Asia.
What is seldom considered, however, is how we think about our economy from a strategic perspective. That is to say, how do we want our economy structured in order to increase our influence in the world and, hopefully, become a major global power in the 21st century? Again, the evidence here points very strongly in favour of an Obama presidency for Canada.
The biggest question going forward -- and this is as much a long-term question as it is a short-term one -- is what rate of economic growth should we be comfortable with in Canada? American growth is expected to outpace ours this year, despite the sheer size of the United States' sovereign debt.
The following proposition is one that Canadians should embrace: The key to long-term prosperity is slower growth. This is true for two reasons.
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The first is the most obvious: Attempts to maximize short-term growth have the potential for the greatest short-term gains but also the largest short-term losses. Certain states have already implemented a financial transaction tax -- driving out some business but eliminating it altogether in other cases -- in order to reduce short-term market volatility.
It's the long-term outlook, however, that should be of most interest to Canadians. With a Republican president in the White House, the United States' primary focus would be to win the growth race with China for strategic reasons. Barack Obama -- according to certain political commentators -- has less of a problem with unchallenged Chinese growth.
As a major supplier to the American market and a potential large supplier to the Chinese one, economic stability within Canada is a must if Ottawa wishes to maximize its geopolitical and diplomatic influence in Washington and Beijing circles in the years ahead. Such a role as an interlocutor between the two major powers of the coming decades is key to Canada becoming a major world power in the 21st century.
In addition to volatile moves to maximize growth that a Republican president would initiate and that would threaten the stability of the Canadian economy next door, a Republican president is even more likely to do something of extreme concern to the Canadian economy: maximize the development of natural resources.
That means more fracking of natural gas and massive moves to exploit shale oil reserves in the American west and not just the American east (where they could be of benefit to Canada if imported). By consequence, that means fewer Canadian natural gas and oil exports to the United States. It also means further deflation in the price of natural gas and possible disinflation in the price of oil, further harming Canada's revenue stream.
Canada is not near the top of the international power pyramid, hence a race to the top is not worth considering. More important -- if our role as a global interlocutor and influencer is to be developed and maintained -- is to find creative ways to incentivize savings and reduce market volatility while finding new means to keep our finances in order. Economic stability is key, for economic might means geopolitical prowess.
This means two things. First, long-term growth will be more reliable, even though short-term economic growth might be reduced. This is a tough sell to make to the electorate, which means that politicians will have to innovate their messaging in the years ahead.
Second, new ways will have to be determined to keep our revenue stream high, due to the slower growth we should expect and want. That means legalizing and regulating cannabis, increasing consumption taxes (while lowering income taxes) and implementing a carbon tax. It also means tackling the national debt aggressively to compensate for the investment that could be lost through the implementation of a financial transfer tax.
The potential for the projection of Canadian influence and values in world is only set to increase in the years ahead. For many reasons, we are finally exiting the shadow of the United States.
Thanks to Barack Obama's re-election tonight, Canadian political leaders of any stripe have the geopolitical wiggle-room to prepare Canada's economy for the coming decades. Whether they put Canadian interests first or choose to play petty politics instead remains to be seen.