One blessing of the surging Canadian dollar may be that it will turn this country’s attention to some pressing economic issues such as productivity, interprovincial trade barriers or even how much the government should be taking out of the economy.
A country that has grown fat on exports propelled by a cheap currency should be taking a serious look at the future now that its dollar has reached par with its U.S. counterpart.
Indeed, it may be time for another royal commission similar to the one headed by Donald Macdonald in the 1980s. It was that commission’s report that started the national drive for a free trade agreement with the U.S.; and most would agree that Canada is a very different — and better — place today than it was in 1985.
Not all of Canada’s economic issues, of course, can be linked to its suddenly strong currency. (The prospect of China replacing Canada as the largest U.S. trading partner would have arisen regardless of the C$’s worth.) But the strength of the C$ is a tangible development that could act as a catalyst for a national debate about from which area Canadians can expect future economic growth to come.
One reason why Canada’s productivity has consistently lagged behind that of the U.S. is because our manufacturers have had such an easy time living off a cheap currency that they felt little compulsion to update plants and equipment.
An important study last year by TD Bank Financial Group economists concluded that our sagging productivity numbers have not received the attention they deserve from politicians and public alike because they are an abstract issue that most people find difficult to get excited about.
The strong C$ could be the hook to grab people’s attention as they realize it won’t be so easy to sell this country’s exports on world markets in future.
But, so far, Canada’s New Government, as it likes to brand itself, is showing no signs of initiating the economic debate Canada needs. Indeed, its preoccupation with easily understandable priorities such as law and order and Dick-and-Jane simple solutions appears to be continuing.
How else could one explain the Conservative Lite government’s handling of the latest embarrassingly large federal surplus of $14 billion the same week the Canadian currency cracked par with the U.S. dollar?
Finance Minister Jim Flaherty mouthed a couple of feel-good platitudes about the strength of the dollar being a vote of confidence in Canada’s economy, etc. Prime Minister Stephen Harper joyously explained how a strong Canadian economy produced a federal surplus that was $4 billion larger than expected and the extra money would go to pay down the debt. Thus, the interest that would have been paid is being passed on to taxpayers in the form of tax cuts that will work out to about $32 per capita — a cookie for every Canadian, in other words.
Of course, you could make the point that a government that consistently finds itself with better-than-forecast surpluses is, therefore, overtaxing its constituents, or deliberately understating its projections to camouflage its overtaxing and overspending ways. Indeed, Harper used to make those very arguments as leader of the Opposition.
But, apparently, there is a difference between being overtaxed by Liberals and overtaxed by Conservatives.
Harper’s love of simple issues and limited priorities is a reason many Canadians now think their new government has reached its best-before date. But they also don’t have much enthusiasm for the Opposition, which has often been missing in action.
Liberal leader Stéphane Dion, as leader of the official Opposition, should have pounced on Harper’s surplus announcement just as he should be demanding to know the government’s strategy for the new era of a strong C$.
Despite efforts by Liberal finance critic John McCallum to get economic issues on the public agenda, Dion seems just as reluctant as Harper to tackle complicated issues.
Ottawa today has little resemblance to the Ottawa of the Mulroney or Chrétien years, or even the short Martin years. Once standing committees used their newly won powers of parliamentary reform to tackle complicated issues and often force action from the governments of the day. Strong ministers left their marks on departments and Canadians had fulsome debates about policy.
Today, ministers who were once fearless and forthcoming on the Opposition benches are, for the most part, silent. Standing committees rarely make news and no one on either side of the House of Commons wants to tackle an issue that the public might not immediately find accessible.
@page_break@It is like the political equivalent of the old Lawrence Welk show — with bland arrangements of old favourites that are easily digestible, much like rice pudding.
Imagine what Canada would be like today if Lester B. Pearson, as the head of our last extended minority government, had taken this attitude with, say, health care, the flag or bilingualism. IE
Harper government leaves much wanting
Our “New Government” is showing no signs of initiating the economic debate Canada needs
- By: Gord McIntosh
- October 17, 2007 October 29, 2019
- 10:31
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