Party’s over Canada — time to buckle down and invest for the next 150: Don Pittis
At parties like those this past weekend, it’s a great tradition for Canadians to celebrate the country’s vast trove of natural resources. Oil, gas, potash, fish, forests and fields of waving wheat are historic symbols of the country’s wealth.
But just as our southern neighbour seems to be tearing itself to pieces over how to share its own enormous wealth, Canada must decide how to invest in its future good fortune.
If we play our cards right, there is no reason why we cannot become much richer yet, as rich as anyone in the world.
And no matter how much we like to complain, there is no question that Canada is rich.
Whether or not you are a fan of Canada 150, in economic terms, the country really does have something to celebrate.
Friday’s gross domestic product figures show the economy has grown at 3.3 per cent over the past year, “far and away the fastest growth rate among the major industrialized economies,” as BMO’s Doug Porter noted at the end of last week.
And that growth comes despite the fact that the oil and gas sector has taken a kicking, both from low prices and from last year’s Fort McMurray forest fire that crashed oilsands production.
According to the Financial Times, the current rebound from that drop in output means Canada can take a large portion of credit (or blame) for falling world oil prices.
The cost of producing oilsands oil has plummeted, now estimated by consultants at Rystad Energy to have fallen as low as $11 US a barrel for steam-extracted crude.
But while Canada has a lot of oil, there is evidence that the total amount of resources is not what makes a country wealthy. It is the human brains that, in the case of the oilsands, figured out how to extract the resource and how to get costs down.
Where to invest
As Canada considers how to invest its wealth for the next 150 years, it might look for lessons in two example countries.
Venezuela, which is poor, is loaded with natural resources, with more oil and gold than Canada. Singapore — which has almost no natural resources at all, it farmland is tiny and it depends on imports for its raw materials — is rich.
Income per person in Singapore is roughly double Canada’s; in Venezuela it is about one third.
The advantage Singapore has is a stable government, a strong social safety net and some of the best levels of education on earth. In the absence of those things, Venezuela’s resources do the country little good.
Canada has so many advantages, it is almost unfair.
While other countries suffer horribly from climate change, experts say Canada will be a net beneficiary as the growing season lengthens.
While the U.S. loses respect due to its own stance on climate change and its me-first policy on trade, Canada remains open and respected and, despite its own oil output, committed to the Paris greenhouse gas targets.
Currently the U.S. is having a battle royale over the cost of paying for health care for its growing underclass. Critics characterize the dispute as cutting health care for the poor to make the rich just a few percentage points richer. Canada’s battle for a system of socialized medicine, while far from perfect, was fought and won 50 years ago.
Compared to the uncertainty in Washington, our system of parliamentary democracy, whether conservative or liberal, has proved remarkably stable.
It’s also true, however, that Canada has a small population compared to the world’s economic giants. We don’t have pools of unskilled workers to fill up factories but, in the next 50 years, automation will likely make that less important.
Punching above its weight
Futhermore, despite its small population, there is a way for Canada to punch above its weight. That is to make sure every person is as stuffed with as much education and training as they can stand.
Spending money on education is not charity. Educating the uneducated is like digging a new mine or putting new farmland into production.
As Indigenous protestors have reminded us this past weekend, Canada is blessed with an untapped resource of people who need more and better education.
The same applies when we welcome refugees whose parents never went to school and make sure they can afford to go to university.
What makes Canada’s natural resources so valuable is smart, confident, educated people working with them, together. By investing in people, we are creating the most valuable resource of all for making Canada an economic world leader in the next 150 years.
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