If previous comments weren't enough, the following article provides an overview of the political and economic landscapes of Canada, take note of references made to Manitoba and the economies of B.C., Alberta, and Saskatchewan.
Western Canada flexes its muscle
Charles Frank, Calgary Herald
Published: Saturday, May 31, 2008
Juggernaut: (1) A huge or overwhelming force or object. (2) an institution or notion to which persons blindly sacrifice themselves or others.
- Canadian Oxford Dictionary Listening to Premier Ed Stelmach and his partner in optimism, Saskatchewan Premier Brad Wall, talk about building a western Canadian economic juggernaut this week, it was hard not to feel a touch of that old western pride.
And, to quietly utter one of those Yesssssssssssses! To hear the dangerous duo's excited chatter, you would be hard pressed not to believe the economic worm has finally turned. Riding high on the unholy convergence of record grain, oil, potash, coal and uranium prices, the Alberta and Saskatchewan economies (along with our equally resurgent counterparts in British Columbia) are poised to kick sand in the face of those perennial economic bullies, Ontario and Quebec.
Or so it seems.
That Ontario is allegedly within spitting distance of becoming a so-called have-not province and a recipient of federal-provincial equalization payments instead of being called on to fund its fellow provinces has only added fuel to the fire -- while inflaming our inherent need to see some measure of comeuppance visited upon our eastern neighbours.
After all, it's been a long time coming. That having been said, we also need to take a bit of a deep breath here, folks.
"Things will certainly feel good," says Conference Board of Canada senior vice-president and chief economist Glen Hodgson, of the euphoria that is gripping politicians and regular people alike across the West. "That's what happens when you get high commodity prices." But -- and isn't there always a but -- Hodgson is quick to add that Alberta, B.C. and Saskatchewan still have a ways to go before overtaking Ontario (not to mention Ontario and Quebec combined) in terms of total economic performance.
In case you were wondering, Statistics Canada reports that in 2007 the Ontario economy recorded $532 billion worth of activity, while Quebec chipped in with about $266 billion.
They're still the one-two punch of the Canadian economy, although Alberta is gaining on Quebec and recorded $189.5 billion worth of business activity in 2007. B.C. generated $163 billion and Saskatchewan a mere $39.5 billion.
All told, the economic production of the three far western provinces
(we're still not sure what to do about Manitoba, after all the Winnipeg Blue Bombers do play in the CFL's Eastern Conference) is still less than Ontario's. Even adding Manitoba into the total won't change the outcome.
That having been said, Hodgson is also quick to point out that there has indeed been a fundamental sea change when it comes to what is happening across the country, economically speaking.
Driven by unprecedented commodity prices -- I mean really, did you in your wildest dreams ever imagine $300-a-tonne coal, $130-a-barrel oil and potash prices that have jumped by more than $400 a tonne in a single year? -- the sky is the limit for the Saskatchewan, Alberta and B.C. economies.
And while observers like Hodgson acknowledge that while commodity prices have always been cyclical, they also suggest there is every reason to believe that the fluctuations of the current cycle will be different -- if and when prices readjust.
"Even if it is a bubble, there has still been a dramatic change in the global demand for those commodities from countries like China and India." Simply put, he doesn't see that demand for western Canadian commodities abating.
In Ontario, it's a different story.
The changes taking place in the auto industry are creating a negative ripple effect throughout the Ontario economy as entire communities struggle to refocus and redefine their economic futures.
And even the tens of millions of dollars in spinoffs from massive Alberta oilsands developments that are being snapped up by Ontario firms won't be enough to keep the nation's biggest economy from going sideways.
And yes, we're well aware of the delicious irony involved in oilsands contracts propping up the Ontario economy.
"Ontario recognizes they have to do something different (to kick-start their economy)," says Hodgson. "They just don't know what." For longtime Albertans, those are familiar words. In the late 1970s they were the mantra of former premier Peter Lougheed, who pushed the province to lessen its dependence on a single industry -- oil and gas -- to avoid the turmoil and uncertainty caused by commodity price cycles.
That hasn't happened. Oil and gas is still the biggest revenue generator in the province and thanks to record oil and resurgent natural gas prices, that isn't likely to change in the foreseeable future.
Our neighbours in B.C. and Saskatchewan are enjoying similar experiences.
Will that -- and the gains from other commodity windfalls -- be enough to turn us into a juggernaut capable of overtaking Ontario and Quebec and wielding a greater share of economic and political power any time soon? The jury's still out. But for now, its just nice to be riding high in the saddle.
cfrank@theherald.canwest.com
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