Canada's economy has lost its balance. Trouble looms.
Those are not words you will hear from Prime Minister Stephen Harper but it is the grim reality of the unsustainable economic ethos of his Conservative government.
Instead of the telling us the truth, the government is spending unprecedented gobs of our money to mislead us about the health of the country with the Canada Action Plan advertising campaign saturating the airwaves. In reality, our petro premier has transformed a balanced country into a petro-state that is "hollowing out" the economy.
Last Friday, we found out we lost 7,000 jobs in February. Statistics Canada noted "there has been little overall employment growth in Canada since August 2013." Economists, in their typical veiled language, are warning us about the dark shadows stalking the economy.
The strongest barrage, however, has come from outside. Ray Dalio's Bridgewater Associates, which the Globe and Mail hailed as one of the world's biggest and most respected hedge funds, says the Canadian economy is "unbalanced and at risk for the next decade."
A decade is a long time to forecast pain.
"The rest of the Canadian manufacturing economy has been hollowed out to a significant degree due to years of underinvestment, as the commodity-driven surge in the currency made other industries unprofitable," according to the note from Bridgewater, as reported by the Globe.
Canada's manufacturing sector has taken it on the chin from the high dollar, which was propped up by the oil mania. "Export growth has shifted from the leading edge of the Canadian economy in the 1990s to a lagging edge," Glen Hodgson, chief economist at the Conference Board of Canada, wrote in a recent dispatch.
Hodgson believes something needs to be done. He called for an "aggressive strategy" to diversify trade while opening up new markets. You could say Harper's initiative to ink a trade deal with Europe helps the country diversify its markets but the problem here is, what if we don't have anything to sell but dirty oil from Alberta?
Right now we are bombarded with headlines from the likes of Heinz, Kellogg's and Novartis saying they are shutting down their plants. Government officials are doing the money dance around the limping auto sector, begging them to stay. Our once techno bright spot, Blackberry, is now Reverse in Motion and slipping fast.
Since 2002, Ontario's manufacturing sector has shriveled by nearly 30 percent, a loss of some 30,000 jobs, according to the economist Jeffrey Rubin. "Once the top employer in Ontario, the manufacturing sector is now a shadow of its former self," he wrote.
You may be thinking we can just wait for oil prices to rise again. Perhaps. But most smart countries are moving as fast as they can away from fossil fuels. We are in danger of stranding billion of dollars of investments in the tar sands while the manufacturing sector implodes.
Canada needs bold new ideas and you can bet we won't get it from the 20th century mob with their anti-democratic tendencies holding a majority in the Parliament (Otherwise knows as the Conservative Party.)
We need to transition to a 21st-century economy with sustainable products produced by sustainable companies. And yes government incentives and welcome mats can go a long way to foster the changes we need.
Let me leave you with two pictures for your mind's eye.
Elon Musk and his Tesla juggernaut have announced plans fora new "Gigafactory" to mass-produce batteries for the company's electricity powered vehicles. It could bring revolutionary changes to not only the auto sector but the solar energy world as well. The company issued a sketch of its vision of a plant, not in China, but somewhere in the U.S., powered by wind and solar energy. That's the future.
Now think of the Alberta tar sands. The massive oil project produces vast lakes of toxic sludge that are a catastrophe waiting to happen. As of last January, tar sands mining has disturbed 715 square kilometres of boreal forest. In 2012, 56 per cent of Canada's oil production came from the tar sands and a doubling of current production of the tar sands has been approved by Ottawa.
Is that Canada's future? We can certainly do better.
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