Why the Resource-Rich Canadian Government Is Always Poor – by Gabriel Yiu (Huffington Post – August 31, 2015)

http://www.huffingtonpost.ca/

Canada is the second-largest country in the world by total area. It has plentiful natural resources and a relatively small population of 35 million. Yet our government always claims it is short of money. Education funding has to be cut, healthcare resources are said to be insufficient, eligibility for Old Age Security is postponed from 65 to 67 and even Canada Post cannot afford to deliver mail to our homes.

Canada might be the first major western country that cannot afford to deliver mail to the homes of its people.

If you tell your friends overseas our situation, they might think that you’re joking.

Many Canadians accept the situation as normal, something that can’t be changed. Yet they do not question the absurdity of this reality.

Here are the world rankings of Canada’s natural resources:

Potash, #1
Uranium, #2
Oil, deposit #3 (production #6)
Nickel, #4
Diamond, #5
Salt, #5
Zinc, #6
Gold, #9
Copper, #9

Many Middle East countries are rich because of oil, but Canada has many other valuable natural resources in addition to oil. Why is our government so poor?

When the price of oil was at record high and Alberta was called the engine of the country, the Albertan Conservative government was in deficit year after year.

A 2013 International Monetary Fund report estimated that Canada annually subsidizes the energy industry at a staggering $34 billion.

Oil exploration in the North Sea by the United Kingdom and Norway provides a telling economic case to the world. Although the U.K. and Norway basically possess similar quantities of oil reserve and commenced exploration at the same time, decades later the country which adopted the economic model of nationalization has an almost $1-trillion reserve, whereas the U.K., applying Margaret Thatcher’s free market economy, ended up $2.5 trillion in national debt.

Like Norway, other countries like those in the Middle East, China, Malaysia and Russia are also using the nationalization model.

For the U.K. and Canada, not only have they adopted a privatization model for their oil and mineral resources, these governments’ tax rates are also much lower than those in Norway. Canada’s corporate tax rate is half that of Norway’s. In additional to corporate income tax, Norway collects a special oil profit tax. In Alberta, the royalties for oil sand production could amount to merely 1 per cent.

For the rest of this article, click here: http://www.huffingtonpost.ca/gabriel-yiu/resource-rich-canada-is-poor_b_8047124.html

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