Two things that seem to have been dropped from the conversation about how Canada's economy will fare as it tries to disentangle itself from the US.
First of all, I don't think it will disentangle itself. Geography is powerful, and our supply lines and habitation patterns are oriented toward trade with the US. Changing those things just to enable the same level of output as what we already had before does not seem like the "investment" we're told is forthcoming from the next federal budget (see: green transformation for another thing that did not make sense for the same reason, absent artificial taxes on the "non-green").
So, PM Mark Carney is doing the right thing in the way he is handling the US trade negotiations - preserve what we can, and reach out to other countries to backfill some of the trade losses where possible as a mitigation strategy (but not a trade replacement strategy).
But, what's not being talked about what should be, at least in the places I am looking?
- Oil prices. They have dropped significantly in the past year, yet rather than talking about how we can put cheap energy to use to increase our value-add (which is what the US, EU, and Russia see when they see cheap energy) we seem to be focused on investing in how we can ship it offshore. Energy prices are a moving target, so you need to have a long-term vision, but it's been an ongoing issue in Canada that we are far more oriented toward shipping commodities offshore than we are with turning those commodities into things that are more valuable - adding value and economic capacity - and using plentiful energy as an accelerator in the endeavour.
- Minimum wage. The EU and the US have low-wage districts that provide them with flexibility. In the EU it is Eastern Europe; in the US it is the southern states. Canada has no such districts anymore - all provincial minimum wages are in a narrow band of agreement - which essentially means it's illegal to hire people in Canada if the business you're running is labour-intensive and can't support the minimum wage as a result. The EU and US have the option to grow the economy by having lower-value work done domestically in those places where it's allowed by the minimum wage. There used to be regular discussion about minimum wage when it was poised to increase but that seems to have gone away, despite being important.
I'm interested to know how much #2 plays a part in the difficulty that so many Canadian students and citizens are having finding entry level jobs, tied to the concern that temporary workers and international students seem to have taken so many of those jobs. Perhaps the minimum wage is so high that unconventional deals (illegal wages, kickbacks, pay-to-work, etc) are in play in those positions because the business requires lower wages to persist. Just speculation, of course, but it's based on real hearsay.
