Those are some pretty depressing charts. It's actually somewhat surreal that we pay $0.75CAD to $1 USD these days, since as I recall several years ago the CAD was actually around the same as USD (even higher at one point).
Also, let's not forget the terrible domestic policies Harper has had, not just economic. Bill C-51 comes to mind. If you view the Wikipedia page on it, you can see how a couple of deaths loosely related to "terrorism" (just a lone maniac with a gun, really) was used to drum up fear and ram through sweeping new powers to various agencies. All at the expense of the privacy of the average citizen of course.
I'll be quite surprised if Harper gains another term. But with 2 left-leaning parties splitting the vote, anything can happen.
I agree that the charts are unfortunate. (Also with your stance on C-51 FWIW.) I wouldn't necessarily agree that the reduction in the CAD/USD recently is a symptom of poor policy though. For one thing, the CAD has remained more stable compared to most other currencies; it's mostly that the USD has gained, likely due to its status as the 'safe' reserve currency. For another, a lower dollar isn't necessarily objectively 'bad'. Yes, it reduces the Canadian GDP as measured in USD (as per that one chart), but that doesn't necessarily translate into a reduced average quality of life for Canadians. (It's good for some, bad for others, and probably not hugely impactful for most.)
Thank you, yes, another great point. Of course, that doesn't necessarily mean a lower CAD isn't 'bad', but it does suggest it isn't really the government's fault. (Unless you feel the government should be working harder to reduce that correlation (and more generally the economy's reliance on natural resources).)
I agree with your points. I guess personally, I just noticed the dollar being low in particular when making online purchases. For instance on eBay, a lot of the listings are often US sellers that are just shipping to Canada. The dollar difference is extremely noticeable when it converts the currency at that point and it's turned me off of buying off eBay as much in recent history.
But if you're buying / selling within the country, the prices haven't gone too crazy, you're right.
On the flip side, my income comes primarily from online sales and advertising, mostly to US companies, which means a lower CAD is great for me. We're a microcosm of importers vs exporters.
Most people probably don't do a lot of either. As for those who do... although increased cost of online purchases must directly affect more people than increased demand and income for exports, when you consider higher-order effects I suspect it could go either way. (Certainly all you ever hear in the news when the dollar moves significantly is how it's good for manufacturers but bad for importers.)
I live in Alberta and feeling the pain. In my opinion, the only industry that might be doing well in Canada is lumber (mainly, BC). With high USD, lumber exporters are making good money and with low crude, they spend less on their machinery.
The entire service industry in Alberta is in chaos and it impacts the whole country. We were the biggest contributors to the over all GDP and employment growth in Canada. Unfortunately businesses are now putting their equipment up for auction, people are losing their jobs and not sure what might happen next.
I am optimistic though - in periods of down turn and recession, people tend to get more entrepreneurial and find ways to bring innovation to their work. For long term prospect, this recession may be helping us in diversifying our portfolio and minimizing our dependency on just one industry.
>In my opinion, the only industry that might be doing well in Canada is lumber (mainly, BC).
I think you're underestimating the strength of the auto industry in Ontario. Canada is actually ahead of UK and France in terms of vehicle production [0].
As a recent Waterloo grad, I can't help but feel that the tech industry in Canada has been losing a lot of talent to the US, even from our own top schools. Just about everyone I know who's good enough to have offers from US companies have taken the offers and left.
And it's not hard to imagine why: the average "highly competitive" salary in Canada is pathetic compared to what you could be making in the US for a similar position.
I think Blackberry has been a prime example of a company hit by this. Even with the advantage of being literally next door to the Waterloo campus, most students I know treated it as nothing more than a "safety" in their co-op and grad job search. So in the end, the only students Blackberry ever had access to were the ones who weren't good enough for the US companies, and the few good ones that didn't want to go to the US for what ever reason.
I can't see this trend slowing any time soon, unless Canadian companies start offering salaries competitive with companies across the border, rather than just with their other Canadian neighbors.
So true. Every one of my highly educated family members are in the US. I'm going to be looking at jobs in many parts of the world, most of them not Canada. There's nothing here right now, except sub par wages and ridiculous house prices.
Even though those charts are framed in economy-neutral terms (positions in global indices, instead of absolute indicators), I still wonder whether setting the comparison year to 2006—right before the beginning of a global recession—has anything to do with the results. Did Canada, perhaps, slip all the way to its current positions in 2007, and then simply not recover? There's no way to tell from the representation used.
2007 was a relatively good year for Canada. Due to a combination of luck and good regulation, our banks did not need bailouts. So Canada weathered that recession better than our peers. Contrast that with now, where we are the only G7 country in recession.
2006 was likely chosen because it was the first year the Conservatives were in power. Noting the 2008 recession as a contributor to Canada's difficulties is a good point to raise though.
One has to consider the sharp fall in crude oil price with it. A worse performing government might have shown better graphs had crude oil price been rising.
Why do people blame governments for these kinds of downturns?
The global oil price took a dive.
Sure, you want a diversified economy, but Canada has not many comparative advantages other than resources and being adjacent to the US.
How do people expect Parliament to just make up successful industries out of thin air?
Is there something stopping a Toronto resident from starting the next big fintech startup? Is there something stopping Vancouver residents from starting the next Salesforce?
It's part culture, part lack of capital. In the US you can get funding for just about anything. In Canada it's nearly impossible, and investors impose ridiculous terms. Government grants help, but its not enough.
As for culture, you're right. Canadians go for the safe, sure bet. Get a job as an accountant or (non-CS) engineer, and enjoy a safe, steady life in the middle class.
Five mentions of the word "conservative". Zero of "commodities" which, in the form of their crashing prices, is 100 percent of what ails Canada. When Bloomberg decided to publish opinion pieces was there any question it would be nothing but shameless liberal propaganda?
We're (Canada, to be clear) one of the richest countries in the world. One of the most educated. One of the most cosmopolitan.
So why is it that we're limited to being a petro-state? We live next to the biggest economy in the world, we're their largest trading partner (and vice versa). They're growing ~4% a year and we're in a recession.
I don't know about you, but I'd like to think that we could do better. The reason the conservatives are mentioned is that they've been in power for 9 years and there's an election coming up. Their only plan seems to be to deny that there's a problem and hope people believe them...
But when they were in a recession and their banking industry had to be bailed out and their housing market crashes and their unemployment hit the roof we didn't get all of that.
It sounds like you want to have your cake and eat it.
I'm probably not voting for the conservatives but at the same time I don't think they're to blame for the current situation. It's not like the Canadian economy used to be more diversified when the conservatives weren't in power, if anything it's the other way around. We're resource rich and naturally that is something that influences the economy.
It's not as if Norway is tanking right now; it is possible to have resources and not be a banana republic. But the Conservatives didn't make that transition in Alberta during the decades of power that they enjoyed there, and they didn't federally over the last decade - and they had the mandate to do it (Canadians, contrary to all evidence, believe that the Conservatives are competent stewards of the economy). They absolutely deserve blame here - this current downturn in demand was not even unlikely.
With the Conservatives there's an unspoken deal: we'll cut social programs, which will hurt, but the economic benefit will be worth it. Canadians in this case neither get their cake (economic growth) nor eat it (social spending), so what exactly have the Conservatives delivered?
Let's see, delivered: TFSA, income splitting (limited), lower taxes, balanced budget, startup visa. At least that's off the top off my head.
Which social programs are we talking about here and what would not cutting them have done to counter the current depression?
Like some other comment said the government can not create an alternative economy. It can only try to product the right conditions. If you have a startup in Canada your expenses are significantly lower than e.g. SV. There are a lot of programs to help you. What more are you asking for? The weak dollar, while sucks for me and you, is great for Canadian businesses that are not resource related, but even when the dollar was at its strongest it was still cheaper to start a business here.
To be fair, Canada's housing market is likely going to crash yet. It's at far beyond sustainable levels with the new reality of the economy, and household debt has soared in the last ~12 years. Canada's housing market was sustained by taking on a lot more debt -
As I'm renting- one can only hope. However they've been saying that for 10 years and the debt structure is very different than what was in the US prior to its crash. If anything the rise in house prices seems to be intensifying and demand here in BC seems to be spreading wider than before. Maybe the difficulties in China will change that, who knows.
But it's absolutely possible - at least conceptually - to have your cake and eat it in the realm of economics. This is literally an entire field where the predominant assumption is that life is not zero-sum game.
That said, I feel that a huge chunk of all of this coverage is just delayed biteback for all the ridiculously heavy handed rhetoric that the Conservative party has been playing over the past ~6 years (for those not familiar, the Conservative Party has heavily played the card of being the party that knows how to make the economy strong). They've been playing the card of being fiscally sound and promoting economic growth, and I'm certain huge chunks of the Canadian media (cough CBC) has been just choking at the collar to call bullshit on it. This is all just sweet sweet payback from the perspective of all of the media for that.
Honestly the biggest shame is that no one setup a sovereign fund like the Norwegians did.
By what metric is that Canadian wealth quantified?
If Canada is anything like Australia, household wealth is essentially the value of the house, which is most certainly not intrinsic, but a function of credit availability facilitating a housing ponzi scheme. How much Canadian mortgage lending is via Canadian banks borrowing from overseas banks in a currency other than CAD? How will Canadian banks deal with the falling CAD?
This is the scenario facing Australia at present, (the AUD made it to USD 0.69 earlier this week, from a high of 1.05 in 2013), and Australia is fucked.
A housing crash for both Canada and Australia in 2008 would probably have been a good thing.
> We're (Canada, to be clear) one of the richest countries in the world. One of the most educated. One of the most cosmopolitan.
> So why is it that we're limited to being a petro-state?
Yeah, that's for you (the Canadians) to answer.
(IMHO) In Canada everybody is very good at doing what they're told, but they're not so good at coming with solutions (I mean, big solutions, not the Stack Overflow kind of solution) by themselves
It's funny how Conservatives are quick to point the finger at Liberal social-spending for all of the ills of a country's economy when they're in opposition, but when they're in power and things don't go well it's "all the fault of external forces." Hypocrites.
No boom, minerals, housing prices, or tulips is ever going to last. Which is why a broad based economy is important. The government of the day is responsible for this.
It comes from a very ancient democracy, you see..."
"You mean, it comes from a world of lizards?"
"No," said Ford, who by this time was a little more rational and coherent than he had been, having finally had the coffee forced down him, "nothing so simple. Nothing anything like so straightforward. On its world, the people are people. The leaders are lizards. The people hate the lizards and the lizards rule the people."
"Odd," said Arthur, "I thought you said it was a democracy."
"I did," said Ford. "It is."
"So," said Arthur, hoping he wasn't sounding ridiculously obtuse, "why don't people get rid of the lizards?"
"It honestly doesn't occur to them," said Ford. "They've all got the vote, so they all pretty much assume that the government they've voted in more or less approximates to the government they want."
"You mean they actually vote for the lizards?"
"Oh yes," said Ford with a shrug, "of course."
"But," said Arthur, going for the big one again, "why?"
"Because if they didn't vote for a lizard," said Ford, "the wrong lizard might get in. Got any gin?"
I have a laugh every time I read this, but it's not a very good analogy for modern politics.
You can't distinguish between good leaders and bad leaders quite as easily as you can distinguish lizards and people. Especially when both kinds spend millions of dollars trying to convince you that they're good and others are bad. Not to mention that this story kinda assumes/implies that people would somehow be better rulers.
We didn't get to the current system in a revolution. It's not like it was designed to work well. All the laws that allow things like massive surveillance, civil forfeiture, gerrymandering, lying in official capacity, obvious corporate bribery ("lobbying", what a nice word), self-favorably changing elections rules for the next election – all of this has been created gradually over decades, often by different parties and people, each of whom put self-interest ahead of their duty to the people and walked away from the disaster at a leisurely pace.
Given complete lack of accountability of individuals properly positioned in the state machine, we will not see any improvements in how the state works. People everywhere are trained to think "if only we elect the Bernie Sanders of the day, everything will change for the better", then either of the two things happen – a) they get elected and don't fulfill even a tiny fraction of their promises, if not the opposite, or b) they don't get elected ("oh well, let's try again in 4-5 years").
Just to clarify, this is not a call to arms to overthrow the government or anything. It's kinda too late for that to work. And that would be grossly illegal. For some reason.
Also, let's not forget the terrible domestic policies Harper has had, not just economic. Bill C-51 comes to mind. If you view the Wikipedia page on it, you can see how a couple of deaths loosely related to "terrorism" (just a lone maniac with a gun, really) was used to drum up fear and ram through sweeping new powers to various agencies. All at the expense of the privacy of the average citizen of course.
I'll be quite surprised if Harper gains another term. But with 2 left-leaning parties splitting the vote, anything can happen.