Ottawa’s industrial policy divides Canada against itself – by Lawrence Martin (Globe and Mail – May 15, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

In the decades prior to 2000, Canada made progress in moving away from being an economy of resource extraction. By that year, as labour economist Jim Stanford has pointed out in an analysis for the Centre for Policy Alternatives, well over half of Canada’s exports consisted of an increasingly sophisticated portfolio of value-added products in areas such as automotive assembly, telecommunications, aerospace technology and more.

But in the past decade, the clock has been turned back. Because of a boom in the oil and gas sector and a range of other factors, the economy has reverted toward being a staples-driven enterprise. “In July, 2011, unprocessed and semi-processed resource exports accounted for two-thirds of Canada’s total exports, the highest in decades,” Mr. Stanford wrote. “Compare that to 1999, when finished goods made up almost 60 per cent of our exports.”
That’s quite a change. A tilt, to be sure, that fits the old cliché about Canadians being hewers of wood and drawers of water. Our fur-trading legends, Radisson and Groseilliers, would no doubt heartily approve. But didn’t someone say the way to go in the 21st century is the knowledge economy?
Until now, the back-to-the-future trend line hasn’t stirred much debate. It’s probably been a case of not wanting to argue with success. Given our natural riches, we should be doing better through tough economic times than other countries, and as the government keeps reminding us, we have indeed been doing so.
But NDP Leader Tom Mulcair has been stirring the pot, sounding the alarm about how the resource boom has inflated the dollar and bludgeoned our manufacturing base, particularly in Ontario, while facilitating an ungreening of the environment. The West is unsurprisingly riled. While Alberta’s Alison Redford has been more circumspect, British Columbia Premier Christy Clark called Mr. Mulcair’s stance “goofy” and Saskatchewan Premier Brad Wall tore some strips off him as well. Mr. Mulcair’s views had been earlier put forward by Ontario’s Dalton McGuinty. He, too, got an earful from the Prairies.
It’s kind of like old times. Region pitted against region. East versus West.

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