Quote:
Originally Posted by suburbanite
Even back when that article was written, Canada was well on its way to becoming the sick man of the G7. In the 2011-2013 period, Canada consistently ranked near Italy and Spain in terms of labour productivity. Worse still, this was during the period of peak oil prices prior to the global declines in late 2014 as OPEC tried to squash shale producers in their infancy. Worsening competitiveness for Canadian oil, a hyper focus on domestic and international real estate investment, and a lack of corporate innovation have all led us from a position of teetering on the edge to straight up face planting off the side of the podium.
Above average levels of home ownership, political stability, and relatively lax restrictions on capital flows was a recipe for a nice shot in the arm for the middle class at a time when the global economy was unstable. However it's akin to a pistol with one bullet in the chamber in that you only really get to use it once. You can't keep firing that gun for each subsequent generation who never has chance to enter the market
The Anglosphere has always had a cultural tendency towards home ownership, which is a large reason why for example, the middle class in the UK has historically been wealthier (at least on paper) than Germany, even though the latter has undoubtedly been the stronger, more diverse economy over the last 20 years. Germans are on average more productive, earn more, export significantly more per capita, etc. yet the average UK citizen is reportedly up to 50% wealthier than their German counterpart. the UK middle class dominates European tourism, secondary home ownership in Spain, Portugal, etc. You could probably argue that although the per capita metrics for Germany are superior in most areas, the UK has a lot of high earning labour due to London's position as a global financial centre. However there's no doubt that the middle class also benefits from a propensity to invest in the most easily leveraged asset class in the world.
|
Germany aside (I don't envy their position right now, and a lot of things that made Germany such an economic powerhouse have been completely squandered), I generally agree with you.
In my lifetime, Canada has always had a very shaky economic footing. When it comes to exports, we oscillate between natural resource extraction at a high dollar, or just having the fortune of being supply chain-integrated with the American midwest and being able to perform the same work as someone in Ohio or Indiana for 25% less. Under Harper we were leaning toward the former, and under Trudeau, we've invested heavily in trying to maintain a foothold in the latter. They both come with huge downsides.
We've always been terrible at innovation. This was as true in 2010 or 1985 as it is now. I remember reading Jane Jacobs' "Cities and the Wealth of Nations" (1984) where she called Canada a "minor economic basket case" and put it on the same level as Ireland. I also read a 2006 OECD report on Toronto, which basically concluded that we were a middling global city that multinational corporations used to do low end, back office work. This role, they continued, applied to the country as a whole.
I don't know how we get out of our low productivity malaise, but I don't put all the blame on the governments we elect. At the end of the day, if our oligarch duopoly companies choose to spend their money on dividends for their shareholders rather than R&D to improve productivity, there's not much governments can do.
Some of it is also not our fault. If, by some miracle, we managed to create a real innovator in a strategically important technology - something like TSMC for Taiwan or ASML for the Netherlands, the Americans would find a way to snuff it out or buy us out and take our IP. Despite all the money the Canadian and Quebec governments could invest, we saw what happened with the C-series and BBD. Innovative companies in smaller European countries have the benefit of EU protection which we don't have.
Anyway, TL/DR: I wish Canada was more dynamic and that we didn't rely on precarious economic models to fuel our growth. We seem to replace one bad idea with another - we went from branch plants making the exact same toothpaste as the plant across the border in the 1980s, to low end call centres in the 90s and 00s to the real estate ponzi scheme of today. But I wouldn't place all the blame with whatever Federal government was in charge at the time.
Prev
Linear Mode
