Exports get blamed, despite the crushed loonie.
Many countries, including the US, report GDP on a quarterly basis. Canada reports on a monthly basis. So today Statistics Canada reported GDP for October. What’s disconcerting isn’t so much that GDP fell 0.3% on a monthly basis – these things happen – though it disappointed economists along the way…
The “results were surprisingly bad,” wrote Krishen Rangasamy, senior economist at Economics and Strategy, National Bank of Canada.
“The GDP report is an ugly snowball of reality to the face of the economy to end the year after a nice run earlier in the fall,” said Douglas Porter, chief economist BMO .
But what was disconcerting was just how much the goods producing sectors are getting hammered across the board.
This chart by NBF Economics and Strategy shows the decline in October (blue bars, left scale), and it also shows that this type of monthly decline, during our mediocre economic era, is not rare. The red line (right scale) shows the annualized rate for the last three months, which is still positive, but careening lower:
Output of the overall goods producing industries caved 1.3% from September. It was broad-based, with manufacturing, mining, quarrying, and oil & gas extraction, construction, utilities, agriculture, and forestry all declining. It more than wiped out the gains of the goods producing sectors in September.
Manufacturing, which contributes about 10% to GDP, has taken a big beating, despite the loonie that the Bank of Canada has successfully devalued over the past few years to make exports more competitive, particularly in the US. But manufacturing output fell 2% on a monthly basis, the largest monthly decline since December 2013. It has gone nowhere since February 2014 (red line):
Both durable and non-durable manufacturing fell. StatCan:
Durable manufacturing was down 2.1%, the third decrease in four months. Almost all industrial groups were down, with the largest declines in terms of output registered in machinery, fabricated metal products and primary metal manufacturing.
StatCan blamed the usual suspect, despite the loonie that the Bank of Canada has lowered so adroitly over the years: exports.
Non-durable manufacturing fell 2.0%, driven by petroleum and coal products manufacturing – down 6.5%, for which StatCan blamed “maintenance and turnaround work at some facilities” – and food manufacturing.
Output of the services sector inched up 0.1% to another record, on gains in wholesaling, retailing, real estate, and well, the public sector – which includes education, the national health system, and public administration. However, transportation and warehousing edged down, and output by the finance and insurance sector fell sharply.
This chart shows the divergence between the services sector, which is creeping higher, and the goods-producing sector whose output is back where it had been in 2013:
So, inevitably, GDP growth forecasts for Q4 are being lowered once again. But new hope is now on the horizon: Canadian exporters are expected to benefit unilaterally from the implementation of the Comprehensive Economic and Trade Agreement, Canada’s controversial and almost sunk trade pact with the EU; and they’re expected to “benefit from a stronger US economy,” as Rangasamy put it.
Clearly, the world is now hooping that Trump will work his magic in the US and around the globe, such as imposing a new 10% tariff on imports into the US, renegotiation of NAFTA (but knowing Trump, possibly not for the benefit of Canada), and if other countries dare to retaliate, a trade war.
So it’s hard to see, if these elements come to pass, how the Canadian economy would benefit. What Canada really needs is a price of oil at well above $120 a barrel and a divine guarantee that the housing bubble can be inflated further for all eternity, and that debt levels on households will never be too high and will never cause these households to buckle. But that guarantee may not be forthcoming, so even the OECD frets about Canada’s house price bubble and its consequences. Read… What Will Happens “If the Boom Ends with a Bang?”
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Are many services outsourced from the US to Canada?
Well, there is the ’65 Canada US Auto Pact. Plus, over 70% of our exports head south, although with the new 10% tariff coming up I suspect our market will diversify big time. Hmm, will the US put a 10% tariff on energy from Canada considering we are the largest foreign supplier ?
http://www.thecanadianencyclopedia.ca/en/article/canada-us-automotive-products-agreement/
Where I live logging and sawmilling still going flat out. Loggers are working over the normal hoiliday break.
I suspect the reason is the price of wood.
Hard logs are presently at US $275/m3 on Asian markets. They rebounded somehow from the depth of 2015, when they were a measly US $250/m3 but the rally we had earlier this year has long evaporated and we are a long long way from the US $403/m3 hard logs got in November 2011.
Soft logs stand where they stood in May 2012, at US $155/m3. They peaked in October 2014 at $193/m3, collapsed this March and have remained comatose ever since.
By contrast wood pulp has done well. By well I mean the price hasn’t changed by a single cent since June 2014.
The logging industry has invested a lot of money in new equipment over the past five years, and that equipment has to be paid off somehow. Feller-bunchers have to worked around the clock during cutting season, usually working 24 hours a day on three or four shifts (depending on ground conditions, fuel consumption etc) and at least five days a week to be profitable.
But I suspect your loggers can always make some good money by going south: the State of California presently has 102 million dead trees that need to be eliminated.
Local health and safety legislation slows the logging squads to a crawl: on a good day a squad will fell 15 trees. As a logger from Arkansas said “I’d lose all of my contracts if my squads felled less than 15 trees per hour”.
I read every comment before I bumped in here.
Canada’s current government recently placed tariffs on U.S. made gypsum wallboard ranging from 110% to 243%. How this can be justified when an American manufacturer is collecting 75 cents for every loonie of revenue, boggles the imagination. And I once was in that industry when you could buy wallboard wholesale for $30USD/Msf- 96cents US per 4×8 sheet out of Lovell, Wyoming. Talk about inflation outside lying government numbers.
Now Canada has one it’s largest industries back in the cross hairs. The lumber tariff, anti-dumping and countervailing add up to 75%. Look in the U.S. Federal Register. And this was started when Pierre and Margaret Trudeau’s spoiled child was still kissing the rump of Obumbler. It is a good thing the stuttering kid that is still pooping yellow gets his U.S. info on the next U.S. president from Canadian news- rebroadcasting NBC and ABC. Not!
Services? Some movie production. e.g. Hairspray 2, My Big Fat Greek Wedding.
The ’65 auto pact benefited manufacturers like Ford and GM rather than consumers. NAFTA was a lot better for consumers but some Canadian industries remained protected (e.g. dairy, banking, broadcasting and telecom) even after NAFTA went into effect.
For some strange reason, American farmers are not allowed to produce shelled hemp seeds (shades of prohibition?), so Canadian farmers have this niche market all to themselves. FYI, shelled hemp seeds are sold in health food stores.
There is nothing surprising about this. The economy was artificially propped up by the housing bubble. Now, that the bubble might have leveled, the manufacturing that benefited from it follows. More roadside robbery from the Bank of Canada on the way, hence the Canadian dollar is down.
The Canadian economy was artificially propped up by high tariffs, going back to John A. MacDonald’s time (Canada’s first Prime Minister). Throughout its history, the country produced very few world class companies. Nortel collapsed in the dot com bust and more recently, RIM appears to have lost most of its market share.
On the plus side, Canadian cities have been spared the urban blight that has engulfed large sections of American cities for decades. Even San Francisco has no go zones. Moreover, Canada has largely stayed out of foreign military entanglements since the end of the Korean War.
If things get really bad they may have to shovel more millions (billions, trillions) at the Financial Industrial Complex, because they’re completely blameless and The Economy depends on them completely.
It’s certainly no use doing anything to restore the Real Economy. That’s for the subject population, after all, and they deserve whatever happens to them.
Walter, “they deserve whatever happens to them” yikes, cynical, don’t blame you.
How’s this for cynicisml: I remember when in the 1980s, the peasants in Salmon Arm, BC pelted P.E.T. & sons’ railcar with rotten tomatoes, cabbages and eggs and such. (https://en.wikipedia.org/wiki/Salmon_Arm) Today, I think his little boy PM is safe because said peasants will have to keep those tomatoes, cabbages and eggs to eat to eat this time.
“yikes, cynical, don’t blame you.”
It’s like this, Jack. The Powers that Be care about the subject population about as much as they care about the cows and the sheep and the chickens, and for pretty much the same reason: the generation of profit.
For them, the problem is that people cost too much. They’re working on that. People aren’t going to like it, but like I said, your masters really don’t care.
Humanity is perfectly capable of creating a society that is just, peaceful, prosperous, sustainable, and enlightened. But you’re not going to get it, for exactly one reason:
Almost nobody wants it.
Almost everybody wants everything for themselves, and to hell with everybody else. And that very simple fact dooms the lot of you, and quite absolutely.
That said, have a merry Chrismas and a happy new year.
walter, i couldn’t have said it better myself. and a wonderful Dickens quote!
this was a wonderful comment thread, it is one of the best things about Wolf’s most excellent website.
and a merry bah-humbug to you all!
Guaranteed that this book shall be prohibited in Liberal Virginia along with Huck Finn and To Kill A Mockingbird. This place where “Merry Christmas and Happy New Year’ are not considered politically correct anymore, however ” happy end of the year’ is the new politically correct thing to say if you are saying anything at all.
Shame falls on UVA, the faculty and the students for your intolerance and narrow minds. God help us from your kind as you march to political office.
Merry Christmas to you Walter.
There is not much demand for the Canadian dollars outside of Canada. If the CAD keeps dropping Canada will have to raise rates do defends the CAD.
Canada cannot afford to print CAD like the US. US is a reference currency and is widely used around the world. Not CAD. Canada will have to do like Russian and raise interest rate.
The CAD should be at 1.50. Still not sure what it’s doing at 1.35.
Perhaps oil?
I am asking myself this same question. I stock pile on everything I could think off because I also believe Canada will see hyperinflation hits soon. I stock razor blade, soap, some part to repair my cars : clips, copper washer and so on.
NotSoSure, wait ’til the ball starts rolling to where it costs C$2 and C$3 to buy one U$. Then we’ll be more like Argentina, S. Africa and Greece but without the warm or mild winters.
The personal debt level has surpassed 20,000 per person, and that does not include mortgage debt. That explains why the services sector is booming; everybody deserves to eat out, have a nice vacation preferably on the opposite side of the globe, a did I say new car every once of a while.
I can add here what my mother said: “Yesterday evening the news said real wages haven’t grown since the 90’s. Yet today I was driving on the freeway past [a shopping mall near where she lives] and the parking lots were jammed full. Where does the money to buy all this stuff come from?”.
credit cards with 20 year terms, minimum $25 payment on 10,000 balance. It is like college debt, it will always be there.
I lost interest in a “traditional” credit card when I read the Mastercard prospect and saw they charge an 11.4% interest.
Who in his or her right mind would pay 11.4% interest to buy non-vital goods and services is a kind of person that eludes me, especially given Euribor has been negative for years now.
Financial regulation precision fine tuned to the point of science. But as it turned out, economics is shamanism mascarading as science. God save us all when something goes pear shaped.
Retirement for the working poor is now 70 years plus. It is government employees, retiring at 55 that are vacationing south.
I wonder how that GDP will look once the mega housing bubble pops ?
You can keep selling houses to each other for so long after all, the music is about to stop for Canada. It is high time.
Canada has the magic valve of increasing immigration levels, last year hit a record of around 270,000.
https://www.thestar.com/news/world/2016/12/23/canadas-real-estate-boom-a-chinese-perspective.html
To a large degree, those immigration numbers represent an expense; welfare recipients bringing over grandma and grandpa or maybe a basket-case relative, under ‘family unification’ from a 3rd world country for free healthcare and a pension. The ones that do work work in the underground economy.
The national ‘budget’ is 70% ‘free’ health care, 500 dollars a month for every resident (not worker) in Canada, and the system hasn’t even matured yet. Meanwhile, all the factories are being or have been converted to condos.
The only answer left is the usual one: blame the United States if the house of cards starts to shake.
“Meanwhile, all the factories are being or have been converted to condos”…maybe, but that is dontown Toronto and we are talking century old buildings where zoning has changed. In the Greater Toronto area the factories are in industrial zones…if a factory closes, it sits idle until another business comes in.
In North Toronto, where I work, I do not see closed factories…I do see help wanted signs.
I am specifically relating to the GTA, as most towns (including the one I gew up in 100 miles outside of Toronto), the factories are sitting idle.
Cheers
See…here in the USA, we simply blame Russia for everything. My friend’s dog tore up the house while they were at a party. They told me that Russia had influenced the dog. I avoid them now.
Canada’s record immigration year was 1913, when about 450,000 immigrants arrived. Look it up.
The effects on the receiving country highly depends on the home country of the emigrants and the current need for the skills/abilities they bring with them.
No welfare in 1913. Only desperate working people came to Canada. Look it up.
The 10 poorest neighborhoods in Toronto have immigrant majorities. Muslim immigrants (not refugees) now make up 76% of Regent Park, Canada’s largest neighborhood of subsidized housing even though almost none of them lived in Canada 10 years ago.
There are now some 140,000 families on the WAITING list for subsidized housing in Toronto alone. Immigrants are NOT the answer since so many of them are poor and never contribute to the economy or the tax base while demanding more and more from the declining numbers of productive tax players,
On top of this, Ontario, the province in which Toronto is the capital, is introducing a carbon tax on January 1, 2017. This will help drive up costs even more for all of Ontario’s citizens, drive out even more manufacturers and increase the speeding snowball of poverty.
Ontario contains 40% of Canada’s population and Toronto, at 3 million people is 4th in North America behind Mexico City, New York and Los Angeles. When a city and province this big and important goes from being productive to UNproductive the whole country feels it.
Canada’s oil industry has all but collapsed. This makes up a huge percentage of Canada’s goods producing industry, because Canada is not a goods producer, it is a raw materials producer.
Government stats lie, and lie big. Canada’s GDP is down easily 20%, no matter what the government says. The only “industry” left is FIRE, which is now cratering too due to the housing bubble.
Mick, “The only “industry” left is FIRE, …” sounds like code for arson, right?
FIRE = Financial, Insurance and Real Estate
Just be sure not to get caught with a can of gasoline and a box of matches in your hands: I don’t know how far mitigating circumstances go these days.
Finance, Insurance and Real Estate- the services that grow from government inflating assets.
http://wolfstreet.com/wp-content/uploads/2016/12/Canada-GDP-manufacturing-output-2016-10.png
Lovely down trend rage developing in that chart which fits the stagnant global economy we have. be interesting to see where Nov goes.
The three major sectors in Canada as defined on the TSX are financials, commodities and materials. There are other sectors on the TSX but their impact is minimal. Given manufacturing is disappearing in Canada, and only employs a small part of the population, why doesn’t Canada peg the CDN peso against the USA dollar. CDNs are paying 5% to 10% more for groceries and produce coming from the USA. I guess the drma teacher needs to stop hobnobbing around world and look at the issues facing most CDNs. Another world polictians out of touch with the issues facing the part time employed CDN
“Another world polictians out of touch with the issues facing the part time employed CDN”
Your masters do not care.
Really, they could give a shit.
My above post says it. It’s going to be a tough winter for tiny Tim.
For now, the children are laughing, the adults are getting tipsy, and dinner is served.
Good night.
Hgtv is the prime source of financial literacy in Canada. Everyone is a landlord, or an aspiring one.
The constant stream of money advice doled out be the likes of income property provide all of the population with the blueprint to wealth. Use leverage to purchase a home, spend 50k to build an income suite and take he cheques to the bank. After the reno 40k of equity just magically appears, while the borrowing even more because of the wealth effect.
Most of the housing shows are subsided by the Canadian government. Indoctrinate the masses with real estate propaganda, a vital tool in misdirection of the masses.
This housing bubble is hidden in plain sight for the observant few. Yet the musical chairs plays on.
I work in the office furniture business based in Toronto…we sell 90% to the U.S. 2016 has been a good year, and our order book is pretty decent heading into 2017, so something is not jiving.
Cheers
“It was broad-based, with manufacturing, mining, quarrying, and oil & gas extraction, construction, utilities, agriculture, and forestry all declining.”
Aren’t many of these sectors under attack from Canada’s government? Soon, political refugees from US will join this party and they’ll be looking for part time employment and healthcare benefits?
Of course they wouldn’t be relocating to Canada if they thought it might be possible to obtain full employment
Expect the Canadian dollar to tank to 1.75 to the US dollar if Trump gets a trade war with China going. China consumes approx 1/2 of all commodities. Watch metals tank and oil tank.
Much as I love gold, it’s going to suffer if China suffers. Not to mention the fact India is going to ban it and kill off that demand.
Geo Nat: Just to play the devil’s advocate, what happened to the price of heroin when it was banned?
Incase you are not aware, China is as broke as a college student. And all those commodities, well just ask the farmers what they plan to do with the pig iron and copper ingots scattered all over their farms in the hopes of a big windfall in speculation, instead of corn and pigs to actually sell.
And, if you don’t think China has had a trade war against the USA for 30 years, just try to send a 5 pound box to China for $2.40 usd. Plate Glass and steel, to name two that are sold at a loss because the Chinese Communist government paid them to do it.
i was reading that ontario liberals are looking into a basic income program for the province. probably doing some feasibility studies. hope we get to vote on it.
well these are some of the things that happen when the previous federal govt wanted to push oil over the rest of the country. personally i think our dollar is way too highly correlated to the price of oil. if it wasnt for the rest of our economy we would probably be looking like nigeria venezuela and every other only oil producing country thats getting slammed. it is now our housing market that is too big to fail that is keeping the govt in check while they try to reinflate house prices. like everyone else debt will be the killer. at least the whole world will go through the collapse together, we will be in good company
“at least the whole world will go through the collapse together, we will be in good company”
Please sir, if the whole wold goes through collapse, you’re going to be wanting to keep an eye on your potatoes, you are. They’re unlikely to be all that safe, sir.
thanks for calling me sir. appreciate that. and you are correct,not just potatoes you will need to watch. but how wide spread this dilemma is, its global. east west north and south.
Dear Dave,
Please use a capital letter at the beginning of a sentence, and a space after the comma.
You don’t make sense otherwise because it reads as a run on sentence. I’ll skip trying to read your writing and thoughts otherwise it is a chore, I may not be the only be one.
Thanks for being understanding.
You guys are a scream. The comments are great. However, I always go back to the basics in my outlook about poor destitute Canada.
Canada produces 2X= the energy it uses domestically.
Canada has excess food production and a huge greenhouse industry producing year-round produce (often sold south….but certainly available to citizens)
Canada still has family dairy and poultry system due to long standing tariffs.
Canada still has an intact rail sytem which connects all major cities.
Canada still has ample land, water, resources of all kinds, and the remnents of a population that knows how to work.
When the financial system collapses as the debt bubble bursts, (throughout the world), where would you like to be?
Philly, St Louis, LA, Atlanta,….etc? Or in our terrible country? When Appalachia is touted as a possible haven going forward, sentiment is quite obvious. I suppose the San Jose computer industry could be re-purposed for the looming Police State, I imagine.
Talking about the basics here, we’ll be okay. At least my family and friends will be. When I look around my community I see people who know how to work. Of course we are a long long way from an urban centre and HGTV productions. :-)
The entire world is standing on a bannana peel of debt. No one is immune from the effects of universal debt, unless you don’t have any. Even then it is going to really hurt. Remember, you can’t eat American exceptionalism, even on a shit sandwich.
Have a great Christmas, folks. All the best from my -3 deg. C slice of riverside Paradise. The turkey is thawing, the stuffing will be ready today, add to that all the fixings including home made wine (Nebiolo for the grape lovers and plum for the table), the pies ready to bake, and the family is getting hungry. Plus, we have no Trump, Hillary, or boy-wonder Trudeau supporters to ruin conversation. It should all be good.
I thought this quote (portion) was appropriate.
“We all long for happiness, an easier life, and wisdom. We learn so slowly that both happiness and the easier life are generally matters of attitude. Therein lies our sought-after wisdom. How much simpler it makes living through even our most feared experiences when we have acquired the wisdom to know that the mind we carry into the moment, any moment, will be reflected in the outcome.”
“Canada still has an intact rail sytem which connects all major cities.”
Wanted to travel to several places techinically covered by rail in Canada. Seems that the Canadian rail system outside cities is now primarily restricted to industrial use.
Bus routes now cover the train routes. Can’t go to the arctic circle anymore!
Well said Paulo, but watch out when you say “we have no Trump, Hillary, or boy-wonder Trudeau supporters to ruin our conversation”…the Kevin O’leary movement is gaining traction?
Cheers and Merry Christmas
Nice comment.
I might add the Canadian economy has a very different structure to the USA.
1. The US spends a fortune on its military (the source of much of its remaining manufacturing), which is a great way to waste money. Canada next to nothing in comparison.
2. The US spends almost double what Canada spends per person on health care for worse outcomes overall.
3. The US imprisons almost 1% of its population. Expensive and non productive.
4. The US has a huge natural advantage being basically a big rectangle where products can move in multiple directions. Canada is basically one really long line. Good for efficiency.
5. The US has another advantage in scale. With a 300 million market, it is easier for companies to scale up and get economies of scale faster than in Canada.
6. The US has better weather, allowing folks to spend less on housing ( trailer parks anyone).
7. Canada has a VAT which works to depress consumption. The US encourages consumption to the nth degree (not good for a trade deficit).
8. The Canadian central government actually ran surpluses for 5 years while Bush was running up big deficits. Canada has also not resorted to QE, unlike almost every other advanced economy.
Net, net the Canadian economy is not as diversified and has some natural disadvantages, especially on scale. The US squanders many of its natural advantages on the military, health care, prisons, and excessive consumption.
Manufacturing was always going to be tough post Nafta as no US company is going to keep a Canadian plant open for market access, and if not producing in the US they would go to mexico or china. That said Canada’s advantage going forward is it educated workforce (on average far better than the US – the number of Canadian that get snapped up by us cos is large – and something Canada needs to find a way to address), and a less fractured society. Still tough, but not impossible to compete with the US, especially if the US keeps producing own goals.
“I suppose the San Jose computer industry could be re-purposed for the looming Police State, I imagine. ”
As an aside, Paulo, you are way behind on this. The Silly Con valley whores are 100% captive to the police state/mic. What do you think all the spy-phones, social media, internet-of-things, data centers and self driving vehicles are all about? You can’t really think that these things are the result of market demand, can you?????
Ontario will end 2016 with a debt in excess of $300 Billion. It will be the largest sub-sovereign debt on earth. How they plan on introducing any new welfare program with a debt this massive and interest rates that will start rising in 2017 is beyond reason.
Ontario has been run into the ground by the provincial Lieberal [sic] party ever since 2003. Future generations are so screwed, it’s criminal.
How any of these new immigrants can afford to pay Ontario’s electricity rates (the highest in N. Am.) is beyond me.
Right now the province of Ontario is borrowing every year just to pay the interest on its accumulated debt–that’s a recipe for bankruptcy if I’ve ever heard of one.
It’s been a year since the first of the Syrian refugees came to Canada. In interviewing one of the refugees, he indicated how he did his homework and settled in Quebec because the cost of living was far less than Ontario.
BTW…I like your reference to the current party in power!
Imagine that every human being outside of Canadian borders ceases to exist. Also assume that the present system in which the vast majority of wealth and large-scale capital equipment is owned by a microscopic percentage of population. Also assume that both “labor” and “management” can organize, as they supposedly can in our present “democracy”, but now the owners of capital can no longer move their capital equipment to other nations where there are desperately poor people who are “willing” to work for food, water and a place on the floor to sleep.
How are Canadians going to “go it alone” when, supposedly, Canada’s economy desperately needs 300,000 immigrants (of a certain “economic” type) every year from now to eternity?
Who’s going to buy all of the natural resources, oil, etc. that Canada can no longer export and, therefore, no longer needs to produce?
To have available the relatively small amount of warm-weather items that only Canada now imports, Canadians can venture forth to those places and produce and send those products “back home”. Naturally, those workers will be paid an amount that also applies to the rest of the Canadian “labor market” and, of course, the Canadian regulatory framework will also apply to those workers and facilities and places of production, as well as Canada’s social benefits.
All of the work that is now done in Canada by “temporary foreign workers” (TFW) and other temporary workers who harvest crops, put roofs on houses, cook food in restaurants, take care of the elderly in nursing homes, etc. will have to be done by Canadians and paid for by Canadians.
Automobiles, trucks, etc. will have to be produced by Canadians for Canadians.
Any thing and any service that Canadians want will have to be produced by Canadians and, naturally, other Canadians will have to pay them to do that, with the workers making enough “profit” to “save” enough money to be able to “retire” when they become physically decrepit.
How much is the above arrangement going to cost Canadians?
When I recently asked my brother in law why Canada finds it necessary to import vehicles, TVs, etc. from other countries, his reply was that if they were produced by Canadians in Canada, “they would be too expensive”. (This coming from a man who hired a TFW to give additional care to his elderly mother who was ALREADY living in a nursing home).
So, could Canadians afford what they need and want by “going it alone” under the present economic system in which the vast majority of wealth and large-scale capital equipment is owned/controlled by a microscopic percentage of population for their own benefit?
No, they can’t afford it under the present economic system. And this is why under the present economic system essentially desperate slave labor is needed to provide what Canadians need. This is why “trade agreements” such as NAFTA between international corporations are needed to exploit the most desperate.
What is needed by Canada is an economic system in which the populace owns/controls large capital equipment collectively, and collectively provides the LABOR to run it, as well as provide all Canadians with what they need to enjoy a good life from birth to death.
Some observations:
On the article –
While the statistics cited do seem to be significant, without calculating the +/- 3 sigma control limits from the historical data, it is difficult to tell if we are reacting to the 1/f or “white noise” of a highly variable process, or if a significant change in the process has actually occurred.
On the comments –
One of the posters suggests that it would “cost” too much if Canada [and by extension the US] produced [more] of their consumer items domestically (including food). The problem lies in determining “cost.” The price paid at the point of sale is not the TOTAL cost of the product or service which must be paid, as considerable “cost externalization” occurs when products are imported. The externalized costs are paid in the form of higher taxes and/or lost governmental revenues, which the consumer/taxpayer must then “make up.” For example:
* The current accounts trade deficit is increased, generally leading to a decline in the international value of the domestic currency,
* The off-shore workers manufacturing the imported product, or providing the service do not pay domestic taxes, do not contribute to the domestic economy, nor contribute to the pension systems.
* The foreign factories do not contribute to the domestic tax base.
* The domestic displaced workers do not disappear, but are forced into dead-end low wage jobs, paying minimal taxes, or onto the welfare roles, requiring in both cases considerable taxpayer support. I do not know the Canadian equivalents, but in the U. S. as a result of this un(der) employment, we have SNAP/food stamps, section 8 subsidized housing, medicaid, subsidized/free school lunches, enormous social costs resulting from drug/alcohol abuse, crime, law enforcement including prisons, etc. etc. which are all charged to the taxpayer’s credit card.
* The domestic government has no control of, and generally cannot monitor the production processes/ingredients of imported products. This is critical in food, where excessive amounts of antibiotics are frequently used, or where unapproved ingredients are added, e. g. urea to boost the nitrogen content.
Wow, talk about national pride blinding you; I know well educated average men in Canada who haven’t had steady, real employment for more than 15 years. The only thing that allows them to survive is the fact that they are staying at their parents home, receive welfare and free healthcare. I know born Canadians who have engineering degrees, and now sit at home and take care of kids, not because they want to, but because they have no alternative.
One other thing that Canada had going for it was that due to early ass-kissing to the Chinese, while China’s economy was booming, a lot of money flowed from China to Canada. For whatever reason Chinese just love coming to Canada. But now that is over too since assuming China’s economy doesn’t collapse, it will never be as stellar as the last 2-3 decades have been.
Another card that I admit Canada does hold is it’s ability to mislead many immigrants around the world to think it is a great destination. I don’t know how Canada does it, but what these immigrants imagine, and what they get when they actually land in Canada is so different from each other.
Oil will never be $100 again as long as US shale oil is around. So, forget about your tar sands to be great wealth producers.
Add the cold weather, and you have one miserable country to live in.
just gonna say, that i am surprised not one person brought up a point that ontario is looking at a basic wage for everyone. i believe there was a european that just voted and hope we are smart enough to do the same. its pretty desperate when governments look to these practices to get things to move. canadian private debt to gdp is 275%. messed up ladies and gents.
as for a miserable country to live thats a bit harsh. sorry no capital letters i have a crappy keyboard just be thankful i can get my space bar towork. takes forever to write this now.
sorry 256% private debt to gdp.
It was Switzerland that had a citizen initiative election (which lost) on the establishment of a basic income for all citizens which would have replaced welfare and other social subsidies, thus eliminating most of the administrative/means testing expense.
Under normal/past conditions/circumstances a basic income or dole for all citizens would appear to be counter-productive, but the times in which we live are anything but “normal.” With the rapid automation/computerization of many jobs, from commercial drivers to middle management and financial advisers, combined with “globalization,” the only apparent alternative to serious social unrest and financial collapse may well be some sort of basic income, given that a consumer economy cannot function if the consumers have no money.
We are in a uncharted and novel socioeconomic/cultural situation, and the old nostrums and panaceas are HIGHLY unlikely to be effective.
A guaranteed minimum annual income, possibly combined with a greatly restricted work week (full time = 20 hours?), may well be the only way to force more equitable distribution of the corporate “profits” resulting from automation/computerization and globalization, possibly by much higher corporate taxes, including a levy on each robot/computer deployed based on the number of people these displace.
FWIW: I lived in Toronto for a year, and several major U. S. cities. IMNSHO Toronto wins hands down as a good place to live, albeit the housing is tight. (I am now retired and live in rural Kansas.)
Canada has surely hit a rough patch, but by practically every metric, they remain a premium destination, and one with an incredibly bright (and enviable) future.
The guaranteed basic income or some form of job sharing is the future due to several factors, with automation/robotics being the most obvious. It is the future. Many find the thought repugnant due to political ideology, but, I expect they too will cash the checks.
“Wow, talk about national pride blinding you; I know well educated average men in Canada who haven’t had steady, real employment for more than 15 years.”
Sounds very much like what happened in the USA with h1-b visas, greencards and the now very very very popular ‘5 years post-grad work program’ for Chinese grads of US colleges that Obama created.
The job market is flooded in good times and bad with fresh faced new comers that turn any ‘gap’ on your resume into a death sentence . Even a 6 month gap is enough to ‘age’ your skills and essentially ban you from the labor market.
The communities outside Toronto are almost all immigrants (just go into the Missasagua Walmart if you doubt me).
People pay taxes to build communities for their families, not so corporations can have limitless supplies of disposable labor.
i noticed two years ago or so that prices in canada had risen, a lot, despite only a mild weakening in the loonie. now they are unaffordable.
getting time to buy canada.
Win-some, lose-some, on the other hand, they’re experiencing record tourist arrivals.
We can thank Justin’s dad Pierre for bring us down. From 1935 until 1974 the money the government needed was created essentially for free by the Bank of Canada. Pierre decided for our own good the Bank of Canada should print bonds and buy money from the private banks creating most of our debit where lots of our taxes go. Now junior want to kill the little guy and give pot profits to the in group.
Thank you, Peter Grady, for getting to the heart of the matter.
I was 26 when I left a thriving gardening & LS design/build business in California to emigrate to BC, Canada, where I now approach my 74 birthday in Esquimalt, BC. I arrived in August 1969, as the Trudeau era began, and became deeeply involved at the inception of the BC Nursery Trades Association, as it was know then. I created the largest reyail-wholesale nurseries in SE BC< in the middle of the Slocan Valley, eventually incorporated as JMR Sales Limited. Much else happened, but this is only to give you some idea how I was self-employed in business.
All was Well in Canada until PET caved into the banks, allowing them to create electronic debt instead of the Bank of Canada do the work of its mandate. The nation's been digging its grave ever since, but that can be reversed if the banks use only deposits on hand as the basis for loans.
The curse of the Rothschild's et al. bankers MUST be lifted, or we will eventually fall into the Pit created by the Fred Res Bunco, which, as you know is not federal, has no reserves, and is not a bank. It is a truly Satanic device of usury & stolen sovereignty. Dr Hotson wrote and others have written extensively on this, as has Richard Eastman, Yakima, WA, , who is especially good on the use of Social Credit to restore our commonwealth and sovereignty.