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Canada didn't forget anything. We have a diverse economy with common sense measures like reducing our net debt to GDP, while keeping a fully funded retirement p

Canada didn't forget anything. We have a diverse economy with common sense measures like reducing our net debt to GDP, while keeping a fully funded retirement pension fund (CPP, unlike SS, actually invests in the public market). Even the way we do provincial transfer payments is sane. While one industry is booming (Oil, manufacturing, tech) other "have not" provinces get payments through the federal government. This brings a measure of stability to the system. No rational economist can look at the situation in Canada and say that "Canada forgot to plan for its future by leaning on oil and the loonie" it's a ridiculous statement. Criticizing Canada's action on climate change is warranted, but our federal economic policy has been quite level headed.

cmrdporcupine 11y ago
Look at the allocation of value on the stock market. Overwhelmingly oil and gas despite that being a rather small part of the economy. Look at the allocation of most mutual funds that a Canadian owns as part of their retirement portfolio. Look at the nature of the previous gov'ts budgetary and economic planning (in as much as they did that kind of thing). Overwhelmingly in favour of the resource sector.
- 3pt14159 11y ago
  That's because all of our non-resource companies are either: 1. American / international subsidiaries. 2. Mid-sized CCPCs. 3. Owned by private equity firms. I agree that Canadians do not allocate their retirement savings correctly and that our stock market is not a reflection of our economy, but our government has common sense measures to support a variety of industries.
  - cmrdporcupine 11y ago
    The gov't was giving preferential tax treatment to resource extraction and deliberately dismantling the regulatory environment around them. Basically extending what the Alberta provincial gov't has done for decades out to the rest of the country. A high dollar also favoured those industries against all others. Not sure if the feds could have done anything about the high dollar, but it certainly choked everywhere outside of the resource sector. A low dollar combined with high investment in education makes Canada a good place to invest to get high skilled talent cheaper. Many American tech companies did this around 15 years ago, I worked for a couple -- marketing/sales HQ'd in the US, engineering talent in the GTA.
    - eigenvector 11y ago
      > A high dollar also favoured those industries against all others. Er, oil is priced in USD and exported from Canada. A low dollar favours oil production just as much as any other export.
- eigenvector 11y ago
  > Look at the nature of the previous gov'ts budgetary and economic planning (in as much as they did that kind of thing). Overwhelmingly in favour of the resource sector. You seem quite married to this simplistic thesis that oil is Canada's downfall, but "just look" isn't an argument. I looked, and the non-oil economic output continued to grow through the oil boom, just not as fast as the oil and gas sector. Yes, oil was a temporary boost, but the country isn't any worse off than if it hadn't extracted that oil. By the way, the government does not enforce oil production quotas in Canada. The fact that the world oil price soared above $100USD causing massive production increases in Canada was not an economic policy of the Canadian government. That's the market economy functioning, not central planning as you imply. The government didn't peg the CAD to world oil prices, the international currency markets did. NOT producing oil in the highest price environment in the history of the world would have been an economic loss for Canada. Furthermore, the last government, like the current one and every Canadian government in living memory, gave billions in handouts to every sector of the economy, especially manufacturing. The federal government spent billions balling out the US automakers in Canada. Yet manufacturing has been declining since the 1990s, long before the current oil boom. Have you seen a chart of labour productivity in Canada vs. the US and Mexico over the last 20 years? We're a high-cost low-productivity environment and not just because of a high dollar. Having actual social security programs and higher unionization rates places a big, structural role in failing to attract and retain manufacturing capacity within NAFTA. It's puzzling that you think the oil production boom in Canada was caused by the Canadian government when production was booming in every petroleum producing country in the world because of high global demand. It's even more puzzling that you think the oil boom of the last 10 years and the supposed policies of the last federal government account for global macroeconomic trends that have existed for 20-30 years.
  - cmrdporcupine 11y ago
    No I don't think the gov't caused the oil boom, or high oil prices or high oil production -- you have created a straw man to rail against. But from their words -- openly lambasting Ontario and Quebec and their provincial gov'ts -- as well as actions they showed a disregard for diversification. Instead of investing money in infrastructure which would increase manufacturing sector effectiveness, they cut gov't revenue significantly, rolled out a variety of boutique tax cuts, and where they did spend money significantly it was in their own ridings. The disparity in the amount of highway construction in Alberta vs. Ontario for example is pretty staggering. And the only two places to see subway construction in Ontario were in Tory ridings -- Vaughan and Eglinton-Lawrence.
patrick_99 11y ago
I'd argue Canada made concerted efforts to support natural resource industries at the cost of all other industries. Eg. expending massive political capital with the US to push for Keystone XL. We've hurt our image abroad by fighting climate change action, Canada even refused to consider asbestos a hazardous material because there's a single asbestos mine in the country. As soon as that mine closed we switched to considering it hazardous. These are short termed, unprincipled policy decisions that help the resource industry at the expense of the Canadian brand.
- fche 11y ago
  "expending massive political capital" Luckily, political capital is a fiat currency and can be created or destroyed by the CBC in moments.
  - wavefunction 11y ago
    How many Americans (US + Mexico + South)/Europeans/Asians/Africans watch the CBC? I think the parent was referring to international political capital.
    - fche 11y ago
      Sorry: I should not have implied that the CBC is the only one with a royal charter for political capital minting/disposal.
- deleted 11y ago
  [deleted]
- DKnoll 11y ago
  Canada has been doing that since it's inception... the first industry in this country was natural resources and since that time it has remained our strongest.
JamisonM 11y ago
Even the way we do provincial transfer payments is sane. While one industry is booming (Oil, manufacturing, tech) other "have not" provinces get payments through the federal government. This brings a measure of stability to the system. Yes and no, the resource-heavy provinces have been working hard for natural-resource carve-outs and natural resource revenues get a 50% haircut going in anyway. Any rational economist can say that Canada went all-in on oil because that is exactly what it did. A prolonged stretch of an inflated loonie has resulted in a long-term reduction in manufacturing capacity which means that the country is not poised to take proper advantage of the decline in the dollar that has now occurred. Instead there will be a ramping-up period where productivity is lost.
- eigenvector 11y ago
  "Canada went all-in on oil" implies Canada had a choice. When the global price of a commodity you have massive reserves of spikes, what else do you do besides sell as much of it as you can?
  - graeme 11y ago
    Plan for the future by not leaning into the upswing of a boom and bust cycle. Governments encouraged more development, accentuating the cycle. Governments could also have established rainy day funds. Alberta has one, but they haven't added anything to it since 1987. Canada as a whole has none (this is somewhat reasonable, as the federal government doesn't have jurisdiction over natural resources) https://en.wikipedia.org/wiki/Alberta_Heritage_Savings_Trust_Fund https://en.wikipedia.org/wiki/Alberta_Heritage_Savings_Trust...
    - forgetsusername 11y ago
      >Plan for the future by not leaning into the upswing of a boom and bust cycle. I disagree. The upswing of the commodity cycle is precisely when you sell. Who knows, maybe oil is obsolete in 10 years. Then we're sitting on a pile of worthless gunk. Get your money when the gettin' is good.

cmrdporcupine 11y ago

Look at the allocation of value on the stock market. Overwhelmingly oil and gas despite that being a rather small part of the economy. Look at the allocation of most mutual funds that a Canadian owns as part of their retirement portfolio. Look at the nature of the previous gov'ts budgetary and economic planning (in as much as they did that kind of thing). Overwhelmingly in favour of the resource sector.

3pt14159 11y ago
That's because all of our non-resource companies are either: 1. American / international subsidiaries. 2. Mid-sized CCPCs. 3. Owned by private equity firms. I agree that Canadians do not allocate their retirement savings correctly and that our stock market is not a reflection of our economy, but our government has common sense measures to support a variety of industries.
- cmrdporcupine 11y ago
  The gov't was giving preferential tax treatment to resource extraction and deliberately dismantling the regulatory environment around them. Basically extending what the Alberta provincial gov't has done for decades out to the rest of the country. A high dollar also favoured those industries against all others. Not sure if the feds could have done anything about the high dollar, but it certainly choked everywhere outside of the resource sector. A low dollar combined with high investment in education makes Canada a good place to invest to get high skilled talent cheaper. Many American tech companies did this around 15 years ago, I worked for a couple -- marketing/sales HQ'd in the US, engineering talent in the GTA.
  - eigenvector 11y ago
    > A high dollar also favoured those industries against all others. Er, oil is priced in USD and exported from Canada. A low dollar favours oil production just as much as any other export.
eigenvector 11y ago
> Look at the nature of the previous gov'ts budgetary and economic planning (in as much as they did that kind of thing). Overwhelmingly in favour of the resource sector. You seem quite married to this simplistic thesis that oil is Canada's downfall, but "just look" isn't an argument. I looked, and the non-oil economic output continued to grow through the oil boom, just not as fast as the oil and gas sector. Yes, oil was a temporary boost, but the country isn't any worse off than if it hadn't extracted that oil. By the way, the government does not enforce oil production quotas in Canada. The fact that the world oil price soared above $100USD causing massive production increases in Canada was not an economic policy of the Canadian government. That's the market economy functioning, not central planning as you imply. The government didn't peg the CAD to world oil prices, the international currency markets did. NOT producing oil in the highest price environment in the history of the world would have been an economic loss for Canada. Furthermore, the last government, like the current one and every Canadian government in living memory, gave billions in handouts to every sector of the economy, especially manufacturing. The federal government spent billions balling out the US automakers in Canada. Yet manufacturing has been declining since the 1990s, long before the current oil boom. Have you seen a chart of labour productivity in Canada vs. the US and Mexico over the last 20 years? We're a high-cost low-productivity environment and not just because of a high dollar. Having actual social security programs and higher unionization rates places a big, structural role in failing to attract and retain manufacturing capacity within NAFTA. It's puzzling that you think the oil production boom in Canada was caused by the Canadian government when production was booming in every petroleum producing country in the world because of high global demand. It's even more puzzling that you think the oil boom of the last 10 years and the supposed policies of the last federal government account for global macroeconomic trends that have existed for 20-30 years.
- cmrdporcupine 11y ago
  No I don't think the gov't caused the oil boom, or high oil prices or high oil production -- you have created a straw man to rail against. But from their words -- openly lambasting Ontario and Quebec and their provincial gov'ts -- as well as actions they showed a disregard for diversification. Instead of investing money in infrastructure which would increase manufacturing sector effectiveness, they cut gov't revenue significantly, rolled out a variety of boutique tax cuts, and where they did spend money significantly it was in their own ridings. The disparity in the amount of highway construction in Alberta vs. Ontario for example is pretty staggering. And the only two places to see subway construction in Ontario were in Tory ridings -- Vaughan and Eglinton-Lawrence.

patrick_99 11y ago

I'd argue Canada made concerted efforts to support natural resource industries at the cost of all other industries. Eg. expending massive political capital with the US to push for Keystone XL. We've hurt our image abroad by fighting climate change action, Canada even refused to consider asbestos a hazardous material because there's a single asbestos mine in the country. As soon as that mine closed we switched to considering it hazardous. These are short termed, unprincipled policy decisions that help the resource industry at the expense of the Canadian brand.

fche 11y ago
"expending massive political capital" Luckily, political capital is a fiat currency and can be created or destroyed by the CBC in moments.
- wavefunction 11y ago
  How many Americans (US + Mexico + South)/Europeans/Asians/Africans watch the CBC? I think the parent was referring to international political capital.
  - fche 11y ago
    Sorry: I should not have implied that the CBC is the only one with a royal charter for political capital minting/disposal.
deleted 11y ago
[deleted]
DKnoll 11y ago
Canada has been doing that since it's inception... the first industry in this country was natural resources and since that time it has remained our strongest.

JamisonM 11y ago

Even the way we do provincial transfer payments is sane. While one industry is booming (Oil, manufacturing, tech) other "have not" provinces get payments through the federal government. This brings a measure of stability to the system. Yes and no, the resource-heavy provinces have been working hard for natural-resource carve-outs and natural resource revenues get a 50% haircut going in anyway. Any rational economist can say that Canada went all-in on oil because that is exactly what it did. A prolonged stretch of an inflated loonie has resulted in a long-term reduction in manufacturing capacity which means that the country is not poised to take proper advantage of the decline in the dollar that has now occurred. Instead there will be a ramping-up period where productivity is lost.

eigenvector 11y ago
"Canada went all-in on oil" implies Canada had a choice. When the global price of a commodity you have massive reserves of spikes, what else do you do besides sell as much of it as you can?
- graeme 11y ago
  Plan for the future by not leaning into the upswing of a boom and bust cycle. Governments encouraged more development, accentuating the cycle. Governments could also have established rainy day funds. Alberta has one, but they haven't added anything to it since 1987. Canada as a whole has none (this is somewhat reasonable, as the federal government doesn't have jurisdiction over natural resources) https://en.wikipedia.org/wiki/Alberta_Heritage_Savings_Trust_Fund https://en.wikipedia.org/wiki/Alberta_Heritage_Savings_Trust...
  - forgetsusername 11y ago
    >Plan for the future by not leaning into the upswing of a boom and bust cycle. I disagree. The upswing of the commodity cycle is precisely when you sell. Who knows, maybe oil is obsolete in 10 years. Then we're sitting on a pile of worthless gunk. Get your money when the gettin' is good.