Western Canada’s economic boom is worth celebrating. The question is, how may we help turn the West’s challenges and opportunities into Canada’s long-term gains?
A NEW CANADA
By Dr. Roger Gibbins
FRSC
President and CEO
Canada West Foundation
All conventional indicators show that the western Canadian economy is booming. Housing markets and urban growth are strong, immigrants and migrants from across Canada continue to flood into the region, and unemployment has virtually disappeared as employers across the board struggle to find employees.
Moreover, this economic strength is characteristic of the region as a whole; although the boom is most pronounced in Alberta, no province is being left behind.
In part, the regional boom reflects the general strength of the Canadian economy. While the West may be leading the national economic parade, it is still part of that larger parade.
The West is doing well because Canada is doing well, and, of course, Canada is doing well because the West is doing well. At the same time, the regional economy has some more distinctive strengths.
Commodity markets are strong, particularly in the energy sector, and the West’s relatively small manufacturing base is not as exposed to global competition as is the older and relatively much larger manufacturing base in Ontario. For western Canadians, strong global economic growth provides markets more than it does competition.
However, there are also challenges that must be addressed. Many of these are challenges that Canada as a whole faces: very tight labour markets, an aging population that will make those markets even tighter, a rising Canadian dollar and troubling signs of weakness in the American economy, under-developed infrastructure connections to global markets, and uncertainty with respect to both energy supplies and climate change.
Other challenges are more unique to the West. For example, the region’s relatively large and relatively young Aboriginal population presents both policy failure to date, in terms of limited integration into the regional labour force, but also a longer-term solution to labour market shortages if we can get our act together.
A second example is the need for resource-based industries, including agriculture, to move up the value chain, to become less reliant on bulk commodities such as bitumen, wheat and lumber.
The larger, more all encompassing economic challenge is how to use the current resource boom to fuel the region’s economic transformation, to use today’s wealth to ensure truly sustainable economic prosperity tomorrow. Although the present boom provides much of the financial wherewithal that will be needed for that transformation, the challenge goes well beyond finding enough money.
We know, for example, that traditional forms of economic diversification will not do the trick. It makes little sense, for example, to use public incentives to lure automobile plants to the prairies, or textile industries to Vancouver.
Instead, we need to get ahead of the global curve, to design a public policy architecture that will encourage creativity and innovation, that will build on existing economic strengths while at the same time moving the region away from a future as a hewer of wood and a drawer of water.
None of this will be easy, but it is essential. If western Canadians take the current boom for granted, if we do not actively plan for the long-term economic transformation and sustainability of the region, then our children and grandchildren will pay the price. And, given the national importance of the western Canadian economy, so too will Canadians at large.
There is an old bumper sticker from the early 1980s that can still be found around Alberta: “Dear Lord, give us another oil boom and we promise not to piss this one away.” That is the promise that all western Canadians, inside and outside the energy sector, should be making today as they ride the crest of an unprecedented boom in the regional economy.
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Also appearing in this report:
“We’ve probably been the best kept secret in Canada, but now the world has taken notice,” said Alan Migneault, CEO of the Saskatoon Regional Economic Development Authority.
“There is enough momentum in the numbers to give a good two year outlook for Saskatchewan relative to the rest of the country,” said Derek Holt, RBC assistant chief economist.
Cliff Mackay, president and CEO of the Railway Association of Canada, says the demand for rail services will increase as trade with Asian markets continues to flourish.
“B.C. and Saskatchewan have realized that they have to market themselves,” says David Pryce, vice president of Western Canada Operations with the Canadian Association of Petroleum Producers.
Currently, according to the Canadian Centre for Energy Information (CCEI), Western Canada is responsible for 89 per cent of Canada’s oil production; producing 2.3 million barrels per day in Alberta, 433,418 in Saskatchewan and 75,554 in B.C.
and more...
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