Canada’s prescription for economic recovery needs to include far more than stimulus survival allocation decisions and other domestic initiatives. The wider world of trade requires attention now because hungrier traders are out to eat Canada’s lunch in North America and around the increasingly dominant Asia-Pacific region.
Unfortunately, large portions of that lunch have already been consumed. Settling for table scraps is not going to cut it in a country where prosperity is in danger of being taken for granted.
Prime Minister Justin Trudeau is fond of describing Canada as a trading nation. More pragmatic international trade observers might more accurately downgrade that description to “was a trading nation.”
Canada still does most of its trading with the United States, and one-trick ponies have limited careers, especially when competition ramps up. As RBC Economics points out in Trading Places: Canada’s Place in a Changing Global Economy, China, over the past 20 years, has replaced Canada as the top source of imports to the United States.
Mexico, meanwhile, has taken over second place, as Canada’s share of the North American auto assembly market continues to drop. Aside from hungrier and more agile competitors, Canada has a chronic productivity problem, an aging workforce and an upwardly spiralling public debt that threatens to limit the country’s ability to bankroll the infrastructure and innovation investment it needs to compete globally. S
till, there is tremendous opportunity in the COVID-19 pandemic’s social, economic and environmental disruption. B.C. and the rest of the country have strong pools of resource and talent in electronics, green energy, life sciences and aerospace.
Combined with its rich natural resource bank, Canada has all the raw materials to be a key player in the Build Back Better economy. But they need to be harnessed and directed with vision and skill. That will require a focus and courage that political and business leadership across the country has yet to exhibit.
