As we approach Canada Day, nation’s 2012 prospects are mixed
For a strong future, it’s time to become a serious nation
Photo: Bruce A. Stewart
By Bruce A Stewart
We’re halfway through the year. Winter’s starting to become a distant memory (aside from in Vancouver, where the rains continue). Canada Day, and its summery celebration, is tomorrow.
How is Canada doing, really?
Compared to most countries, we’re really doing rather well. We built a real estate bubble of our own with imprudent lending practices, and as it deflates that’ll hurt the people who are over-leveraged, or bought at the peak. But we’ve at least taken action to try and stop an explosion.
Our resources remain in demand, and will for years to come. True, most of the rest of the globe is slowing, but for many of our buyers — especially the ones gateway projects on the Pacific are designed to reach — slowing means “down to 4-5% per year” from 10%. What imperils further development is a capital shortage, brought on by five years of near zero interest rate policies globally, stagnant stock markets, and the crowding out of debt financing by governments all over the planet.
Our banks are mostly sound: their risk is mostly tied to the risks of others rather than to mistakes they’re making. (There’s no shortage of banks in Europe, the US, and elsewhere that are bankrupt: walking dead that could fall over with any event.)
Those are the good news items. But the rest of 2012 will be increasingly difficult all over the world, and here at home as well.
Aside from Saskatchewan, we’ve failed as a people to rein in our governments. All of them are deepening their debt, and running deficits. None of them has anticipated a global economic crisis in their plans, which means we’re at risk of even deeper problems they’re not prepared for. Ask Alberta how oil prices 25 per cent below their planned annual average is working out. Ask Québec how decreased industrial use of electricity in the US Northeast and Mid-Atlantic states is working out.
Darrell Dexter, the NDP Premier of Nova Scotia, is trying to right his province. Brad Wall of the right-wing Saskatchewan Party is working to keep it that way. So this isn’t a left-vs-right issue: it’s a common sense-vs-pandering issue.
We’ve got some people in all parties that get it. We’ve got a lot of people in all parties that don’t see the urgency.
Look, anyone who thinks all those head offices we gave up when one after another our companies were sold to outside buyers are going to manage their Canadian assets for our benefit is a loon. Look at GM: GM Canada gets to build the products most affected by any downturn. This is typical (and BMO is busy chopping unproductive branches of its US subsidiary, HarrisBank, far more viciously than it would branches in small-town Canada in exactly the same way).
We have repairs to make to our national infrastructure, new needs to build, and it’s a pretty fair bet that EI and welfare demands will increase as fallout from global contraction hits Canadian jobs. That’s government spending demand that no one planned for.
We, as citizens, need to rise up and tell our politicians — regardless of party politics — to get their house in order. Drive a meat axe through the wasteful practices. Rein in the bureaucracies. Make some tough decisions, separating essentials from nice-to-haves. Balance the books, making room for these quite predictable spending needs that fall out of a global downturn.
Trade agreements alone won’t keep us healthy. Neither will wishful thinking or platitudes. Smoke-and-mirrors certainly won’t. Neither will blaming the Members Opposite.
We could come out of this as the G-7′s only strong nation. Or we can tumble into the pit with the rest of them.
This Canada Day weekend, it’s time to decide: which Canada do I want.
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