Stephen Harper hopes to be re-elected on his boast that he knows -- better than anyone else -- how to manage the Canadian economy. But the evidence keeps suggesting that he doesn't know what he's doing. Murray Dobbin writes:
However you see it -- as separate from society or integral to it -- Canada's "economy" is increasingly at the mercy of a risk-averse, inept corporate elite addicted to government tax breaks, and an ideologically addled government which more than anything else is simply incompetent. It is a deadly combination -- a sort of dumb and dumber team slowly dragging us backwards at a time when the world is just hoping there won't be another economic collapse.
Consider our sliding position among OECD countries:
An OECD study reported in the Globe shows that Canada has dropped out of the top 10 in R&D spending and now ranks 12th. While we de-industrialize and fall back on raw resource exports, previously underdeveloped countries -- Taiwan, Indian and Brazil -- are now outspending us as they industrialize.
We continue to decline in the World Economic Forum's World Competitiveness Index as well. For 2014-2015 we rank 15th. But even worse, in the category of "innovation and sophistication factors" we rank 25th. In 1998 our overall rank was sixth. Some of the countries that now beat us: the United Arab Emirates, Taiwan, Hong Kong and Singapore. The dramatic decline in R&D has a continuing negative impact on labour productivity as well. According to OECD figures, for the year 2012 we stood at 73 per cent of the U.S. benchmark of 100. This failure to increase labour productivity through investment in new machinery and innovation has a huge impact on our standard of living and the domestic economy: as wages stagnate and personal debt increases domestic consumption starts to flat-line -- and that further suppresses investment.
And, while Harper trumpets his trade deal with Europe, India isn't even on his radar:
The other media report that reveals the pathetic level of government and corporate leadership on the economy focused on our complete failure to look to India as a potent export market. It is the fastest-growing economy on the planet yet Canadian corporations and their government partners seem asleep at the switch. Kevin Carmichael in the Globe and Mail quotes the president of Canada-India Business Council: "We've got to get in here fast or we're going to miss the boat. You've seen a rush to the gates [from other nations]. We seem to be taking a slow walk." Currently exports to India account for a minuscule 0.63 per cent of Canadian exports -- and 45 per cent of that is raw materials. Canada scarcely does better in other emerging nations. Of our top three destinations for goods, the U.S. takes 74.5 per cent, China 4.3 per cent and the U.K. 4.1 per cent. Australia, a Pacific nation we compete with, is far more diversified in its export destinations: China 29.5 per cent, Japan 19.3 per cent, South Korea 8 per cent, India 4.9 per cent.
The only thing that Mr. Harper is focused on is getting Canadian oil to foreign markets. But it's becoming apparent that Alberta bitumen simply costs too much to produce. And its overall economic benefits are miniscule:
Frances Russell highlighted the fact that "Canada's energy sector created only 1.7 per cent of all new jobs in Canada from 2007 to 2012." That was just 13,000 jobs. Compare that to the 22,000 jobs created in a single month, December 2013, in health care and social assistance. "The energy sector accounts for only 0.1 percentage point of the average 2.25 per cent annual GDP growth over the last decade," according to the IMF. As for the alleged benefits accruing to other provinces, a dollar invested in the tar sands boosts manufacturing in the rest of Canada by three cents and GDP in Ontario by four cents. And if none of the pipelines from the tar sands were built? The economy would grow 0.5 per cent less by 2020.
If you look at the numbers, it begins to dawn on you. If you buy Stephen Harper's vision of the Canadian economy, you're buying a pig in a poke.