Canada stymied by poor competitiveness and sluggish growth

[Anonymous]

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[Anonymous]

Canada is sooooo FUBAR. It's all a self-inflicted wound too. This country is governed by the woke who wants all of us broke. That isn't no joke.

[Gaon]

I am thankful Justin Trudeau is not Israel's prime minister. I wish he was not Canada's prime minister either.

[Anonymous]

I am thankful Justin Trudeau is not Israel's prime minister. I wish he was not Canada's prime minister either.

It's so hard to believe the deliberate pain this government inflicts on working families like mine..



But, this is North America in 2021.

[Anonymous]

I no longer give a fuck what Canada does. However, for those of you who intend to stick around, you can expect less and less money for  government services unless Ottawa comes to it's senses.

Without the tens of billions of dollars Ottawa takes out of Alberta, Canada would be deep in a sea of red. And federal transfers, which move billions of dollars to Atlantic Canada and Quebec, would face impossible pressure.



For example, from 2007 to 2019, (the most recent year of comparable data), as detailed in my new study published by the Fraser Institute, Ottawa annually pocketed $22 billion (inflation-adjusted) more in revenue from Alberta than it spent in the province — good for a $280-billion surplus over the period.



That means the federal deficit would have been $22 billion higher — annually — without Alberta's contribution, and the federal debt $280 billion greater. Looked at another way, Alberta covered the lion's share of federal deficit spending in other provinces. Ottawa spent $197 billion more in Atlantic Canada over the period than it raised in revenues. And $200 billion more in Quebec.



Unfortunately, the scale of fiscal federalism is seldom understood. Fiscal federalism isn't just equalization. Most net transfers come through imbalances in other programs such as employment insurance, social programs and various subsidies. For example, from 2007 to 2019, Ottawa raised $617 billion in Alberta and spent slightly more than half that amount ($337 billion) in the province. In other words, Ottawa raised $156,471 per Albertan but spent only $84,980, for a net outflow per person of $71,563, equaling 6.4 per cent of Alberta's GDP.



Over the same period, Ottawa spent $178,466 per Atlantic Canadian with revenues of $95,513, for a net federal transfer of $82,953 per Atlantic Canadian. Although total net transfers to Atlantic Canada and Quebec over the period are roughly the same, per-person transfers to Quebec ($24,756) are much smaller due to its larger population.



Clearly, without the Alberta cushion, Canada faces tough fiscal choices. Ottawa could run deficits forever (or until people stop lending us money). Or once the COVID crisis fades, Ottawa could cut spending and reform fiscal federalism. The latter option does not seem to be in the cards, though it offers the best route to restoring fiscal balance.



Of course, governments — including the Trudeau government — could improve Canada's fiscal situation by tackling a root cause of Alberta's economic malaise; its lack of access to markets due primarily to a dearth of pipeline capacity.



The Energy East and the Northern Gateway pipeline projects were killed primarily by political pressure.



Canada depends on Alberta's fiscal health. The province's economic challenges should motivate a review of fiscal federalism and another look at Energy East and Northern Gateway. Alberta's economy will suffer without them. But so will Canadian taxpayers from coast to coast.

https://edmontonjournal.com/opinion/columnists/opinion-canada-faces-tough-fiscal-choices-without-albertas-fiscal-cushion?fbclid=IwAR0mnPvUoHwo3VAZSxEr56YNl3jjW5rhK6Hi-kxLJ4dmsCD2HY2ZQkd78QM">https://edmontonjournal.com/opinion/col ... Y2ZQkd78QM">https://edmontonjournal.com/opinion/columnists/opinion-canada-faces-tough-fiscal-choices-without-albertas-fiscal-cushion?fbclid=IwAR0mnPvUoHwo3VAZSxEr56YNl3jjW5rhK6Hi-kxLJ4dmsCD2HY2ZQkd78QM

[Anonymous]

Not only the revenue for health care, but the jobs. I knew Manitobans who went to Alberta for $150,000 a year jobs that Trudeau and I guess the former Alberta premier killed.

[Anonymous]

This cannot continue indefintely without real consequences for Canadians.



Trudeau has presided over worst business investment growth of past five prime ministers



In fact, there has been an average annual decline of 0.2% in the four years leading up to the 2020 recession



Between 2016 and 2019, an almost unprecedented chorus of business leaders warned about Canada's lagging competitiveness and declining attractiveness to entrepreneurs, business owners and investors.



On the broadest measure of investment, which includes residential and non-residential (i.e., business) construction, machinery, equipment and intellectual property, the Trudeau government presided over an average annual decline of 0.2 per cent in the four years (2016-19) leading up to the 2020 recession. By comparison, in similar four-year periods leading up to recessions we find that the Harper government (2011-14) averaged 5.1 per cent annual growth in business investment and the Chrétien government (1997-2000) enjoyed average annual growth of 7.5 per cent.



Of course, like many industrialized countries, Canada has experienced a boom in residential construction. If you remove business investment in residential construction and focus more specifically on investment in plant, factories, machinery and equipment, the results are even worse. On average, this narrower measure of business investment declined by 1.5 per cent annually during the Trudeau era (2016-19). The equivalent period under Stephen Harper, 2011-14, saw average annual growth of 7.9 per cent, while under Jean Chrétien business investment averaged 9.3 per cent year growth from 1997-2000.



The Trudeau government has experienced the lowest average rates of growth of business investment — in fact, growth has been negative — of the past five prime ministers going back to Brian Mulroney.



What's even more worrying is that there seems to be no acknowledgment of this problem in Ottawa nor any interest in reversing course on policy to actually encourage and attract business investment to this country. Simply put, Canada's recovery cannot take hold unless business investment is revitalized. And this will require policy change in Ottawa.

[Anonymous]

According to the Canadian Energy Centre, U.S. natural gas exports have increased by 37.9 million cubic metres a year since 2014, while Canada's have fallen by 1.8 million.



The story is similar with oil and bitumen — no new pipelines equals no increased sales. (Actually, Canada has completed two regional pipelines since Trudeau came to office. However, the Americans have completed 55.)



About $200 blillion dollars in natural resource investment has fled Canada under Trudeau's watch. And at least 180,000 jobs have went to other countries.

[Anonymous]

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[Anonymous]

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Wind and solar are inefficient energy sources and low productivity jobs.

[Anonymous]

The way Canada is set up, at least under anybody named Trudeau, holds us back.



Why Canada is rigged against Alberta — and any province that isn't Ontario or Quebec

Climate change policy would not create such tensions in the country if Canada was built for more than two provinces

https://nationalpost.com/opinion/carson-jerema-canada-is-rigged-against-alberta-and-any-province-that-isnt-ontario-or-quebec">https://nationalpost.com/opinion/carson ... -or-quebec">https://nationalpost.com/opinion/carson-jerema-canada-is-rigged-against-alberta-and-any-province-that-isnt-ontario-or-quebec



The Supreme Court's ruling upholding the federal carbon tax doesn't rewrite the Constitution, as dissenting judges argued, so much as it reaffirms how Canada has always worked: Ottawa will interfere with natural resources as it pleases, even if it is damaging to the West. That Ontario was one of the losing plaintiffs matters little. Institutions that make up this country are faulty to their core, biased in their makeup towards the Central provinces. It's a wonder that Canada works at all.



From the time of the National Policy — which protected Ontario industry with tariffs, to the detriment of export-oriented Western farmers who paid inflated prices for equipment — it has been painfully apparent that some regions are mere afterthoughts. When Manitoba, Alberta and Saskatchewan became provinces, they were initially denied control over their resources. Then there was the National Energy Program that aimed to keep oil prices artificially low and remains the best example of Ottawa favouring Central Canada at the expense of other regions.



It isn't that politicians in Ottawa are necessarily out to get the West, but that Canada's constitutional structure over incentivizes policies geared towards the Central provinces.



As the political scientist Donald Savoie argues in his book, "Democracy in Canada," this country's "national political institutions were designed for another country." The United Kingdom has its own regional divisions but it is a fraction of the size of Canada, and in 1867, the UK remained the perfect example of a "unitary state," meaning there was no competing level of government with powers comparable to the national government, the way there is in a federation.



Political power in Canada can be gained without winning a single seat outside Ontario and Quebec. Together, the two provinces account for 57 per cent of the 338 seats in the House of Commons. Ontario alone accounts for 36 per cent, while Alberta counts for just 10 per cent. Albertans suddenly voting Liberal won't change this equation or how its interests are viewed by Ottawa.



Intensifying the House of Commons' focus on "national" issues, to the detriment of regional matters, is its level of partisanship, which is almost unique to Canada. When members of Parliament are expected to always vote along party lines or face the prospect of being demoted or even expelled from caucus, there is little room for regional deviation.



The House's distribution of seats by population is not problematic on its own, but there are no institutions that can effectively balance provincial interests against national ones. That was theoretically the role of the Senate, but it lacks democratic legitimacy and the seat distribution is still weighted heavily towards Ontario and Quebec, with 24 seats each. No other province has more than 10 seats.



In the U.S. Senate, each state is represented equally with two seats, and the Electoral College gives states influence in choosing the president. On this side of the border, there is no national institution that can give a voice to regional concerns, "unless they are anchored in vote-rich Ontario and Quebec," Savoie argues. "Canada does not have the same kind of safeguard for smaller regions as other federations."



These tensions are not limited to disputes over the regulation and taxation of resources. Quebec companies win contracts for building ships or maintaining fighter jets despite more competitive options in New Brunswick, British Columbia or Manitoba, provinces that just do not have the electoral clout to assert themselves. Problems facing Ontario's auto industry and Quebec-based Bombardier are always treated as a grave national concern, despite the fact that for all other provinces, they might be considered regional issues.



Nor are tensions limited to one political party. Former Alberta NDP premier Rachel Notley was highly critical of the Liberals' Bill C-69, which created a host of new regulations that makes the building of new pipelines near-impossible. "This is not how you build a country," she said two years ago.



Whatever the merits or lack thereof of the Liberal carbon tax are beside the point. Climate change policy developed in Ottawa by those indifferent to the needs of the West would not create such cleavages in the country, or indeed be so squarely targeted on a single region, if Canada itself was built for more than two provinces.

[Anonymous]

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[Anonymous]

I hope it means jobs, jobs, jobs.



Once again commodities are coming to Canada's rescue

There are risks but good news is coming to the Canadian economy, including Alberta and the other Western provinces

Canada's per capita GDP growth from 2016 to 2020 was the worst five-year performance since the Great Depression: an annual rate of minus 0.75 per cent. Sure, the pandemic was the major reason for negative growth in that period but even so, 2016-19 per capita growth was only 0.5 per cent a year — barely better than flatlined. No surprise in that. Canada was gut-punched by a quick, sharp decline in commodity prices in late 2014, moribund business investment after 2015, and transportation blockages holding back resource exports in 2018 and 2019. It was hard to gain any speed.



But good news is coming to the Canadian economy, including Alberta and the other Western provinces. As health restrictions lift, people will want to restore what they missed most – entertainment, travel and social gatherings – instead of onetime purchasing of consumer durables (housing and autos). With built-up temporary savings from eye-popping government transfers, more money will be available for debt reduction and retirement saving, as well as to pay inflated prices or higher taxes (the latter two being the price of running up huge public deficits). Our most important trading partner, the United States, is in overdrive to pump up growth, including imports from Canada.



Is Canada on the cusp of another commodity boom? At least for the next few years, it seems so. Agriculture, forestry and energy will drive Western Canadian growth. BMO is predicting Alberta will have the fastest GDP growth in Canada in 2021, topping six per cent, followed closely by British Columbia. Growth in 2022 is expected to exceed four per cent in Canada generally, a welcome relief from the last five stagnant years.

https://financialpost.com/opinion/jack-m-mintz-once-again-commodities-are-coming-to-canadas-rescue">https://financialpost.com/opinion/jack- ... das-rescue">https://financialpost.com/opinion/jack-m-mintz-once-again-commodities-are-coming-to-canadas-rescue

[Anonymous]

I saw this in MSN news. It could happen here.



https://twitter.com/DavidStaplesYEG/status/1557772425055506432?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1557772425055506432%7Ctwgr%5E7ffc12b620272a714fee11de5d770642db256282%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fedmontonjournal.com%2Fopinion%2Fcolumnists%2Fdavid-staples-are-we-canazuela-has-canada-lost-the-capacity-to-pull-off-great-national-projects">https://twitter.com/DavidStaplesYEG/sta ... l-projects">https://twitter.com/DavidStaplesYEG/status/1557772425055506432?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1557772425055506432%7Ctwgr%5E7ffc12b620272a714fee11de5d770642db256282%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fedmontonjournal.com%2Fopinion%2Fcolumnists%2Fdavid-staples-are-we-canazuela-has-canada-lost-the-capacity-to-pull-off-great-national-projects

For Bruce's part, the answer is directly related to a massive national industrial undertaking in hydrogen fuel that he is trying to help build.



If we can't build out a hydrogen industry, and if we fail to build new transmission lines, new mines, new pipelines and new LNG projects, Canada really will be Canazuela, as critics of industrial policy now refer to this lovely but naive and complacent country.



We'll be moving down the path to being a poor and chaotic Venezuela North.



There's a multitrillion-dollar market coming in hydrogen, a low-carbon fuel in this global warming era. Canada can get at least $100 billion per year of that market, Bruce said, if we can build export pipelines.

https://edmontonjournal.com/opinion/columnists/david-staples-are-we-canazuela-has-canada-lost-the-capacity-to-pull-off-great-national-projects">https://edmontonjournal.com/opinion/col ... l-projects">https://edmontonjournal.com/opinion/columnists/david-staples-are-we-canazuela-has-canada-lost-the-capacity-to-pull-off-great-national-projects