Economically, Alberta is commonly compared to the other provinces with a host of superlatives – lowest unemployment, fastest population growth, strongest investment markets, etc. – and normally, these comparisons place Alberta at the head of the parade. But new research reveals one area where Alberta is, at best, in the middle of the pack. This may have serious implications for the province’s future economic prospects.
A recent report from Statistics Canada on business innovation suggests that companies in Alberta are well behind the national average on investments in advanced technology. The types of advanced technology identified in the survey include computerized design and engineering, automated material handling, information integration and control technologies, biotechnologies and green technologies, to name a few.
We all know the guy. You see him at the wedding reception or summer barbeques – maybe he’s your cousin’s husband or the guy from work a few cubicles down. He’s pleasant enough, but he just doesn’t know quite how to carry himself or hold a normal conversation. He says weird things and has bad breath. We have a term for him: he’s socially awkward.
Recent events have raised an unsettling question about Canada and our role in the global economy. Are we carrying ourselves properly? Do we say weird things? Are we “globally awkward”?
There’s something intuitively appealing about the notion of supporting local businesses. Some municipalities have procurement policies that require local governments to buy from local vendors, or at least give local businesses preferential treatment. It seems only logical to keep those dollars within the community.
Many cities even have advocacy groups that have gone to the trouble of printing their own physical complementary paper currencies as a way of encouraging local commerce. In Calgary, for example, a local grassroots club operates the Calgary Dollars program, which, according to its website, “keeps our money local, which supports local businesses and entrepreneurs, and gives them our money instead of large corporations.”
It’s a well-known truism about economic indicators that one month does not a trend make. That’s encouraging news for Canada’s job market. If the loss of 46,000 jobs in December were to mark a trend, the country would be in serious trouble.
Alberta – the economic powerhouse of the country – also shed nearly 12,000 jobs last month. But trends are built over several months, and December’s loss comes on the heels of five consecutive months of gains in Alberta.
Most of us were taught that price inflation is driven by a fundamental imbalance: too much money chasing too few goods.
In Canada, the data seem to support this theory. Real economic growth wallowed below 2 per cent for most of last year, and average weekly earnings rose a paltry 1.4 per cent in the year to October, 2013. Not surprisingly, consumer price inflation in Canada is benign. Over the past twelve months, the annual inflation rate has averaged a mere 1.3 per cent.
But Alberta appears to be defying economic gravity. Unlike the national economy, Alberta’s real GDP has been expanding at a pace above 3 per cent for the past few years.
When it comes to governments in this country, agreeing to disagree is about as Canadian as maple syrup and hockey.
The latest bickering revolves around an issue that is certain to gain attention in the years ahead: How can we adequately prepare ourselves for financial retirement?
Most of the quarrelling focuses on what to do (or not do) with the Canada Pension Plan. And while there’s more disagreement than consensus, a key piece of logic is missing from the discussion.
Economists love to poke their noses into subject matters they know nothing about. But in defence of economists, there’s usually an economic angle to the debate. So in the time-honoured spirit of intrusion, it’s necessary to weigh in on two news items this week that have enormous implications for the labour market – and the economy – of the future.
The first is the Organization for Economic Co-operation and Development’s Program for International Student Assessment, which showed Canada’s 15-year-olds have slipped in the global rankings in math competency. Falling behind countries such as Singapore, Hong Kong, South Korea, Switzerland, Estonia and Finland, Canadian scores have dropped 14 points in nine years. Math students in Shanghai performed at the highest level. (Although as Jeff Johnson, chair of the Council of Ministers of Education Canada, correctly pointed out, there is a social equity issue as well. Canada may fall behind Shanghai, but our students still have a better chance of success regardless of socioeconomic background.)
“I’m going for dinner,” my friend said when I asked about her trip to Montreal. She’s the owner of one of Calgary’s finest restaurants and it seemed like a long way to go for something to eat. “There’s a restaurant there that I love and I’ve got to go back,” she explained. She also had a good friend to visit and spent a few days there, but the trip was really motivated by that one particular restaurant.
Fine dining isn’t a new concept, of course; the Michelin Guide started awarding stars to restaurants back in 1926. And the wealthy have always prized a delicious meal in what used to be called “fancy” restaurants. Thirty years ago, many Canadians would dine out only when they travelled or for a special event such as a birthday or anniversary. By the 1990s, dining out had become a common way to socialize. It was recreational.
Most of us remember as children learning the Bible’s Golden Rule: “Do to others what you would have them do to you.” It’s too bad that so many of our politicians and trade negotiators seem to have forgotten this, especially around free trade and procurement.
The pitfall with trade liberalization is that governments want only the parts that work in their favour. They would love it if their domestic or provincial businesses were to have broader access to bid on contracts or sell product into other jurisdictions with no tariff barriers or obstacles. But when it comes to outside companies gaining access on their home turf, suddenly they believe the free-trade agreement needs some tweaking.
This column originally appeared in The Globe and Mail on October 25, 2013.
Why is it that people with good intentions so often suffer from terrible logic?
A good example is the so-called “divestment” movement, popular these days with academics and environmentalists concerned about global warming. The idea is to urge everyone to sell their shares in petroleum companies as a way to punish them for digging up and selling hydrocarbons. The website for one particular movement, gofossilfree.org, smacks the reader in the face, saying:
“It’s wrong to profit from wrecking the climate. It’s time to divest from fossil fuels.”
As with a lot of well-intended causes, the divestment movement tugs on emotional heartstrings but lacks any intellectual basis. There are two non-financial reasons why investors could be persuaded to sell their stocks in an oil company, neither of which makes any sense if carried to their logical conclusion. Worse, both could exacerbate the environmental problems.