undefined | Better HN

0 pointseigenvector10y ago0 comments

> Look at the nature of the previous gov'ts budgetary and economic planning (in as much as they did that kind of thing). Overwhelmingly in favour of the resource sector.

You seem quite married to this simplistic thesis that oil is Canada's downfall, but "just look" isn't an argument. I looked, and the non-oil economic output continued to grow through the oil boom, just not as fast as the oil and gas sector. Yes, oil was a temporary boost, but the country isn't any worse off than if it hadn't extracted that oil. By the way, the government does not enforce oil production quotas in Canada. The fact that the world oil price soared above $100USD causing massive production increases in Canada was not an economic policy of the Canadian government. That's the market economy functioning, not central planning as you imply. The government didn't peg the CAD to world oil prices, the international currency markets did. NOT producing oil in the highest price environment in the history of the world would have been an economic loss for Canada.

Furthermore, the last government, like the current one and every Canadian government in living memory, gave billions in handouts to every sector of the economy, especially manufacturing. The federal government spent billions balling out the US automakers in Canada. Yet manufacturing has been declining since the 1990s, long before the current oil boom. Have you seen a chart of labour productivity in Canada vs. the US and Mexico over the last 20 years? We're a high-cost low-productivity environment and not just because of a high dollar. Having actual social security programs and higher unionization rates places a big, structural role in failing to attract and retain manufacturing capacity within NAFTA.

It's puzzling that you think the oil production boom in Canada was caused by the Canadian government when production was booming in every petroleum producing country in the world because of high global demand. It's even more puzzling that you think the oil boom of the last 10 years and the supposed policies of the last federal government account for global macroeconomic trends that have existed for 20-30 years.

0 comments

2 comments · 1 top-level

cmrdporcupine10y ago· 1 in thread

No I don't think the gov't caused the oil boom, or high oil prices or high oil production -- you have created a straw man to rail against.

But from their words -- openly lambasting Ontario and Quebec and their provincial gov'ts -- as well as actions they showed a disregard for diversification. Instead of investing money in infrastructure which would increase manufacturing sector effectiveness, they cut gov't revenue significantly, rolled out a variety of boutique tax cuts, and where they did spend money significantly it was in their own ridings. The disparity in the amount of highway construction in Alberta vs. Ontario for example is pretty staggering. And the only two places to see subway construction in Ontario were in Tory ridings -- Vaughan and Eglinton-Lawrence.

eigenvectorOP10y ago

You're entitled to your opinion of the Harper government, but Canada isn't a centrally planned economy, and the Prime Minister's comments don't play a role in capital allocation in the economy. You're pointing at a handful of politically charged decisions that play a vanishingly small role in the performance of the overall economy today. Besides, your statements are inaccurate. The Harper government spent more on municipal public transit than every other federal government in history combined. The Eglinton subway you cite isn't even funded by the federal government, it's funded by the Ontario government you claim Harper hated. You missed the Scarborough subway which runs entirely through Liberal ridings. Public transportation is a provincial responsibility and the Harper government was the first federal government to invest in it substantially, doling out billions for subways in Vancouver and Toronto and the Toronto government's SmartTrack program. I hope you realize the entire existing Toronto subway system was built without federal funding.

I don't really want to defend the Harper government's track record on transportation, because I don't think they did enough, but trying to say that Canada lacks economic diversification because Harper didn't build enough subways is just ludicrous.

Government program spending both in real $ and as a percentage of GDP are higher today than when Harper took office, although they've declined from the peak of the 2008 recession and stimulus program. Direct program expenditure by the federal government was 12.8% of GDP in 2005-06 and 12.9% in 2014-15. Cutting taxes doesn't mean cutting spending, if the economy is growing. The biggest cuts to government spending occurred during the 1990s as part of Chretien's deficit elimination program. Spending has only now recovered to the level of the mid-90s. This is all shown in Finance Canada's fiscal tables. I suggest you examine the numbers yourself rather than relying on newspaper editorials that cherry-pick examples.