Executives urge Canada to diversify beyond natural resources – by Richard Blackwell (Globe and Mail – June 22, 2015)

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.

It is beginning to sink in among the Canadian business elite that the economy is going to have to start weaning itself off oil.

The latest quarterly C-Suite Survey shows that almost two-thirds of Canadian corporate executives – including those in the west – feel Canada’s economic policy relies too much on Alberta and its natural resources. Fewer than one out of five say the economy currently has a good mix of industrial sectors.

As the next decade unfolds, priorities must change, they said. Information technology, renewable energy and services will rise in importance to the Canadian economy over the next 10 years, the executives said, outpacing mining, automotive and oil.

David MacDonald, chief executive officer of Softchoice Corp., a Toronto-based technology services firm, said the need for diversification is becoming a strong theme both in corporate corner offices and in Bay Street financial circles. The spate of recent initial public share offerings outside the energy sector is one sign of this, he said. “You are starting to see that even the equity markets are starting to focus on non-resource-based companies.”

To accelerate the shift, he said, the federal government should put more emphasis on promoting innovation, particularly in manufacturing and technology. “We’d like to see more investment in the clusters of Toronto and Waterloo, to drive more technology jobs,” Mr. MacDonald said. “[They are] creating real value in the Canadian economy and diversifying it.”

The fact that Prime Minister Stephen Harper has signed on to the recent Group of Seven declaration to get the world off fossil fuels by 2100 is an indication that Ottawa at least recognizes the need for a long-term trajectory of shifting to other sectors, Mr. MacDonald said. However, “Canada’s credibility at that table is pretty suspect given the continuous focus by the government on how to export more oil,” he added.

A strong majority of executives surveyed said more effort, including government financial assistance, needs to go to clean technology, information technology and the pharmaceutical and biotechnology sectors. But more than half also support government help for pipelines, mining and oil refinery construction, which will continue to expand for the time being.

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