It has taken sustained stupidity but Canada’s leaders are finally managing to bring down one of the strongest economies in the free world
Frank O’Brien
Western Investor
Less than a decade ago, the Canadian loonie was flying at 91 cents against the U.S. dollar, construction and natural resources were posting the fastest employment growth of any industries in the country and real business investment had soared 14 per cent from a year earlier. Canada was ranked 10th in the world in GDP and the per-capita share of GDP was $47,513. Western Canadian Select oil was selling for US$63.42 per barrel. The federal debt was $563 billion.
Today the loonie has crashed to around 75 cents against the U.S. greenback, construction spending is tanking with new residential construction seeing the largest decline since 2009, real business investment has stalled, employment in the resource sector has plunged by more than 50,000 workers in the last two years and the percapita share of GDP has fallen to $45,077, ranked 20th in the world. Western Canadian Select is selling for US$33.93 per barrel. The current federal debt has surpassed $1 trillion.
There is now talk of a recession in Canada and the blame for the projected crash is clearly tied to government policies.
Government tinkering began as a way to cool a hot residential market and it has been wildly successful, which even the Bank of Canada (BOC) noted after housing sales in Vancouver crashed by 40 per cent and national housing starts nosedived.
The BOC’s projection for gross domestic income growth for 2019 is now 0.9 per cent. This is less than half of the growth in 2018.
“Staff analysis suggests that the combined effect of tighter mortgage guidelines and higher interest rates has been larger than previously estimated,” the BOC noted in a January statement. Oops.
Homebuilders note that the mortgage changes have driven first-time homebuyers out of the market and devastated cities like Calgary and Edmonton, which certainly didn’t need any further brakes on housing sales.
In B.C., Alberta and Saskatchewan, the source of the oil and gas industries that bedrock the Canadian economy, the federal government appears more focused on social issues than flowing resources to market.
The feds are trying to ram Bill C-69 in place, legislation that would include such highly subjective issues as “social impacts” and “gender implications” as criteria for future resource development.
As a tiny group of Indigenous protestors illegally blocked work on a vital multibillion-dollar natural gas export pipeline this January, B.C.’s minister responsible for natural resources showed up at the blockade to offer snacks and his personal support.
It is time our government leaders began supporting the people and the industries that keep the lights on in this country, because times are getting dark indeed.
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