Tuesday, December 21, 2010

Great Expectations?

It was the best of times; it was the worst of times. Actually, it's neither. Welcome to politics in Canada at the end of 2010. As Lawrence Martin noted this week, borrowing from Ralph Goodale, it has been a year where mediocrity has reigned supreme.

In an attempt to get some discussion going on the issues, I asked you - the reader (he said hopefully) - for ideas. The hope is that discussion can lead to engagement, and that engagement can in some small way move us from mediocrity and towards meaningful debate.

Believe it or not, I have received some suggestions. Health care, the role of our banks, and the role of MPs being three great ones. I have also been succinctly reminded that "it's the economy, stupid". Having received such a direct suggestion, I think we should start there. In the end, it will likely be the top of mind issue for a significant number of voters.

Over the past 18 months we have been told that our economy is in strong shape; that Canada fared better than most and that our banking system - a core driver of economic growth - is the envy of the world. While much of this is true, it would be wrong to suggest that all is well.

The global economy is not in a happy place, and given that it is so heavily integrated, Canada is vulnerable. The risk of sovereign defaults and the future of the Euro is casting a long shadow. In Canada we are being warned about growing household and government debt, while in the U.S. we see our major trading partner continuing to struggle.

My view on government is the following: government is not about having all the answers, but it's about asking the right questions. So, in terms of the economy what are the questions? Let's start with the following:

1. What does the future of manufacturing in Canada look like? What do we need to do to prepare? What role can governments play in helping Canadian companies become more productive and competitive, including helping them shift their production offshore?

2. Investment drives economic growth - it can provide capital and drive innovation. What can Canada do to attract investment? Should foreign ownership regulations be relaxed? If so, across the board or only in certain sectors?

3. Economic priorities and social ones are not mutually exclusive - they are interdependent. What investments should Canada be making in social services (education, health, pension reform, aboriginal communities) with an eye towards building a more innovative and productive economy?

4. A trading nation is a more innovative and competitive nation. How can Canada grow as a trading nation? What is the role of government beyond negotiating market access and investment protection?

The answers to these questions and others will impact trade, jobs, personal finances, our pensions and RRSPs. In other words, how all of this plays out will affect Canadian prosperity.



  1. "What role can governments play in helping Canadian companies become more productive and competitive, including helping them shift their production offshore?" Lacking the skill set to produce a more erudite reaction at this moment all I can muster is an unholy... WTF!
    I mean really WTF?
    One would think it was incumbent on a FEDERAL government to KEEP jobs ONSHORE rather than facilitate their exodus. Am I missing something here? Tax rates for Canadian corporations are already too low, now we wish to encourage them to move operation offshore? Who benefits? Most certainly not Joe and Jane Canuck.

    Head-Shakingly yours,

  2. Oh, BTW, could you please (pretty please?) adjust your comments section to allow people to be notified of any/all follow-up comments on a post. It's a pain in the ass having to revisit to see if a discussion has progressed ;)

  3. Thanks for your comments. In terms of off-shoring, I think it is important to realize that the global economy has undergone tremendous change. Increasingly, companies are using supply chains to develop, produce and ship their products in a more productive, and therefore more competitive, manner. Governments cannot, and should not, discourage this practice. Doing so would result in a more insulated and less competitive Canadian economy.

    What governments should be doing is looking at how the value-add, be it research and development, high-end manufacturing, etc., remains in Canada. Similarly, we want the decision-making and management to be Canadian. And we want the profits flowing back to Canada.

  4. On your second point, I think I have re-configured so that you can get a notification when a comment has been posted. Let me know if has worked.


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