After five years of suffering in eco-zealot purgatory under the Trudeau Liberals, the half million or so Canadians whose livelihood depends on the oil and gas industry finally got some good news: The oilsands are now part of the government’s green energy agenda!
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In an Aug. 12 interview, Natural Resources Minister Seamus O’Regan told the National Post’s Derek Brower, “there’s no way we are reaching net-zero (Canada’s 2050 emissions target) without Alberta.”
O’Regan went on to express support for new pipelines that would allow output to grow by over a million barrels per day next year and continue to rise after that.
In stark contrast to the Liberal government’s previous vilification of the industry, O’Regan lauded the ingenuity of Albertans in finding ways to “draw oil out of sand.”
This stunning reversal couldn’t have been imagined prior to the COVID-19 crisis. Why now?
The answer came in the minister’s own words: “our prosperity and our economy are still highly dependent on it.”
How dependent? The industry is by far the largest contributor to both GDP and net export revenue, each more than $100 billion per year.
And Alberta has long been the largest net (money sent versus received) contributor to Ottawa’s coffers, amounting to $95 billion from 2014 to 2018, more than all other provinces put together.
The $83 billion revenue drop in former finance minister Bill Morneau’s July 8 “fiscal snapshot” shows why growing Ottawa’s most important revenue source is so critical.
The snapshot projected an astonishing $343 billion deficit.
Two days later, the government announced employment insurance system changes that will cost $37 billion, taking the deficit to $380 billion. Further spending escalation is a certainty, including help for stretched provincial health care budgets, cities unable to fund public transportation and hard-hit business sectors.
It’s now clear that our national debt will exceed $1.2 trillion, twice what it was when the Liberals came to power in 2015.
The last time Canada faced such an enormous financial challenge was after the Second World War.
Back then, demographics came to the rescue: the post-war baby boom, combined with soldiers returning home to help produce desperately needed consumer goods, transformed the economic picture.
Now we have the complete reverse. Decades of collapsing birth rates have created a “baby bust” and those self-same baby-boomers are now leaving the workforce and driving higher public spending for old age security payments and eldercare.
And yet, as the saying goes, “we ain’t seen nothin’ yet.”
COVID-19 is causing a massive restructuring of vital business sectors.
Retail, which employs millions of Canadians and occupies vast amounts of real estate from street-side shops to malls, faces profound uncertainty from the pandemic-driven shift to online shopping.
Lockdowns facilitated an array of new communication tools that allow many of us to work remotely, emptying office towers.
The potential impacts are staggering, including mass unemployment and devaluation of the commercial real estate that underlies both public and private pension funds.
The full impact of these and other post-COVID structural shifts, especially in transportation and accommodation, are yet to be known, but it’s clear they will be profound. Government tax revenues will fall, while the need for support and training of displaced workers will increase.
In the face of such alarming prospects, it seems the coronavirus has fostered escape to a fantasy state where reality is magically replaced by an imagined world that is whatever one wishes it to be.
It’s baffling to hear our government declare the pandemic has created an “opportunity for public investment in green restructuring of the economy,” which translates into subsidizing windmill and solar-power companies.
How will that work out? Ask Ontarians. They have seen home and business electricity rates skyrocket to produce very expensive and completely unreliable power.
Navigating these shoals would be difficult enough if our economic outlook had been strong before the crisis. But alas, that wasn’t the case.
Statistics Canada data shows that, since election of the Trudeau government in 2015, investment in 10 of our 15 major business sectors has dropped by 17 per cent, as both Canadian and foreign investors have fled. More than $185 billion left the country.
This exodus mirrored sharp drops in our performance in both the World Bank Ease of Doing Business ranking and the World Economic Forum Competitiveness Index. Canada’s strong employment rate over this period was driven by unsustainable deficit spending, not private sector investment.
Reigniting private-sector investment that will generate, rather than consume, government revenues will require a clear and profound reversal of both attitude and action by the Trudeau Liberals.
Minister O’Regan’s comments about the oil and gas industry must be followed by clear, early federal government action. Similar encouragement and action are needed for other resource sectors, including mining, where an Alberta mine expansion proposal has recently seen federal action to stop it.
Here’s a note to our new Finance Minister Chrystia Freeland: Achieving private sector investment and job creation is the only hope for keeping the good ship Canada from smashing onto the post-COVID rocks, sinking a nation that held such great potential.
Gwyn Morgan is a retired business leader who has been a director of five global corporations.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
