‘We are facing more challenges than in recent decades, and I think it’s time we be more thoughtful and focused on the longer term’
As calls for economic diversification are renewed in Alberta amid work to recover from the economic toll of the COVID-19 pandemic, a Calgary researcher says traditional diversification may not be the answer to stabilizing the province’s economy.
When things get tough in Alberta, people often say the province needs to diversify by stepping away from a reliance on oil and gas toward new or better industries, said Robert Mansell, a professor emeritus of economics at the University of Calgary and research fellow at the School of Public Policy.
The shocks of low oil prices and the COVID-19 pandemic have revived the discussion, Mansell said.
However, he argued that effective diversification is more likely to include increasing the range of goods and services produced by existing sectors in the province, promoting growth of markets for exports and creating competitive substitutes for imports.
“We can’t think there’s a quick fix to changing the industrial structure. There are things we can do, in terms of diversifying markets, expanding the range of products and improving the investment climate for new industries,” Mansell said Thursday.
Mansell and his fellow researchers determined that Alberta’s rate of employment diversification is one of the best in the country, but is worse off when it comes to income diversification and value-added — or GDP — due to the size of the oil and gas industry.
Some of his suggestions for improving the stability of Alberta’s economy include reintroducing a heritage fund to save money, rebalancing federal procurement and repatriating the federal carbon tax.
“We do have a record of building strength in adversity,” said Mansell.
“We are facing more challenges than in recent decades, and I think it’s time we be more thoughtful and focused on the longer term. As opposed to looking for short-term fixes, let’s have a serious conversation about what we need to do over the next decade or more, and how we’re going to do it.”
The paper concludes that the instability of the province’s oil and gas sector remains the highest risk to Alberta’s long-term prosperity. However, the province has the tools to adapt and innovate in a way “that will be critical in achieving a successful transition for this dominant sector.”
Mansell’s report is one of 24 research papers by the School of Public Policy, which will ultimately be grouped together to create three e-books published by the school. The research for the Alberta Futures Project is anticipated to form a basis for new policy to revitalize the province, with information on alternatives for Alberta’s fiscal, economic and policy future.
The reports touch on various topics — including financial planning and sustainability, Alberta’s energy sector and poverty — from a number of experts and researchers. And the project will also look at the future of Alberta’s health care, as the province transitions out of its pandemic response in the coming months.
“This is to bring together thoughtful analysis of where we’ve been, where we are and what the future looks like, and what we should be doing to anticipate it,” said Mansell.
“Not everybody agrees and some talk about some of the hard choices that need to be made, like if we’re ultimately going to have a sales tax.”
Two of the reports — written by authors Mansell and Robert Ascah — were released Thursday as pre-publications.
Ascah’s research looks more closely at the province’s debt, the importance of addressing debt and how Alberta’s current fiscal crisis compares to those of the past.
OTTAWA – Bank of Canada governor Tiff Macklem says there is a lot of uncertainty around how artificial intelligence could affect the economy moving forward, including the labour market and price growth.
In a speech in Toronto at the Economics of Artificial Intelligence Conference, the governor said Friday that the central bank is approaching the issue cautiously to get a better understanding of how AI could affect its job of keeping inflation low and stable.
“Be wary of anyone who claims to know where AI will take us. There is too much uncertainty to be confident,” Macklem said in prepared remarks.
“We don’t know how quickly AI will continue to advance. And we don’t know the timing and extent of its economic and social impacts.”
The governor said AI has the potential of increasing labour productivity, which would raise living standards and grow the economy without boosting inflation.
In the short-term, he said investment in AI is adding to demand and could be inflationary.
However, Macklem also highlighted more pessimistic scenarios, where AI could destroy more jobs than it creates or lead to less competition rather than more.
The governor called on academics and businesses to work together to shed more light on the potential effects of AI on the economy.
“When you enter a dark room, you don’t go charging in. You cautiously feel your way around. And you try to find the light switch. That is what we are doing. What we central bankers need is more light,” he said.
This report by The Canadian Press was first published Sept. 20, 2024.
The Canadian Press. All rights reserved.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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