Hewers of wood and drawers of water – for years, that’s been the rap against Canada’s economy: A one-trick pony, too hooked on natural resources.
For once, we can be thankful for all that oil, base metals, petro-chemicals and potash. As economy watchers close the books on 2013 and crystal-ball next year, it’s clear a stoked resources sector has done much of the heavy lifting to keep Canada out of the worst of the global muck since the economic meltdown of 2008.
Underlining the point, the Conference Board of Canada this week reported Alberta has been our largest contributor to economic growth for the last three years, outpacing the much larger economies of Central Canada. Expect the same in 2014.
Resources, however, are notoriously cyclical, and already we’re seeing signs of a downside including huge layoffs at fertilizer giant Potash Corp. of Saskatchewan and a loonie trading near a three-year low as world demand for our oil and other riches falls. The paradox – in a country that’s also relied on the consumer and government to help us ride out the recession – is that higher growth, in the mid 2% range, is forecast next year.
The reason? An improving world economy, especially the all-important U.S. market.
While that may sound comforting, it underlines a flaw as worrisome as Canada’s reliance on natural resources: Our economic strategy, if we have one, is to hope others do well.
As we’ve seen in southern Ontario, the nation’s manufacturing heartland and home to one of its richest farm belts, that’s no strategy at all. It didn’t keep heavyweights like equipment giant Caterpillar from closing its train-locomotive plant – not when the same work could be done for less in Indiana, a right-to-work state with cheaper wages. Nor did it stop food giants Heinz and Kellogg, the latest pull-outs, from closings that will wipe out 1,300 jobs.
What the country really needs is an adult conversation – with all governments aboard – on what we do best, how to support it and what to let go. Better to have that talk now, in an improving economy, than in one headed into the mire.
– Greg Van Moorsel