Topic: OT…The rising Canadian Dollar

[saint_satan]

Again, its tough to make useful comparisons with systems that are different.  American GDP is higher BUT half the country doesn't have any kind of social security inluding health care and the U.S. government is still running a MONSTER deficit in order to keep taxes lower.

[johngenx]

BUT half the country doesn't have any kind of social security inluding health care

I agree.  We are not the US, and personally, I don't want to be them.  44 Million US people don't have health care coverage.  They have a larger rich/poor gap than we do and are facing an eroding public education system (systemic attack).  We need a game plan for the type of society that we want, and work towards building it.  Taking one isolated measure like productivity and holding us up as a failure is insane.  Why don't we measure murder rates?  I'd rather use that standard!

Now, the original topic was about the Canadian dollar.  My neighbourhood has some older folks that pine for the day when the dollar was on par, and they use the currency exchange rate as THE indicator of the state of our nation.  Why?  It's easy.  It's right there.  However, it's way too simplistic and ignores so many factors that measure a nation's economic health.

30 years ago the US accounted for under 40% of Canadian trade.  Today, it's over 80%.  Why have we lost the diversification of our trade base?  Global shipping is easier than ever.  We have become far too reliant on the US economy.

[Mdxtasy]

http://www.mytelus.com/news/article.do?pageID=canada_home&articleID=1731125

It's a start.

[johngenx]

Private-sector employment was little changed.

So much for business doing their part...

...all job creation came from the public sector.

[Snowman]

The 1989 Canada-U.S. Free Trade Agreement changed this country for ever……Thank you Brian. Canada's population is not large enough to support strong economic growth. Prosperity would be found in the export of goods and services to the United States. Remember 1981-1982? The country went through a terrible recession that strongly shook the foundations of Canada's welfare state…..wake up call.

The facts:
CANADA-U.S. ECONOMIC INTEGRATION  

•   22% of total U.S. exports to Canada  
•   19% of total U.S. imports from Canada  
•   U.S. and Canada largest bilateral trading relationship in world.
•   Over $1 billion in daily 2-way trade in goods and services between U.S. and Canada.  
•   U.S. exports almost 3 times as much to Canada as to Japan, and more to Canada than European Union  
•   $139 billion in U.S. FDI in Canada, providing over 1 million Canadian jobs
•   Affiliates of U.S. companies accounted for 10% of Canada’s GDP in 1999  
•   67% of U.S. merchandise trade with Canada is intra-firm
•   Canada #1 source of foreign tourists for U.S.  
•   In 2001, Canadians bought per capita $5,254 of U.S.-made merchandise, and Americans $768 of Canadian-merchandise, but Canada has a huge trade surplus with U.S.
•   Canada #1 supplier of energy products to U.S.


(Message edited by snowman on October 08, 2004)

[johngenx]

Remember 1981-1982? The country went through a terrible recession that strongly shook the foundations of Canada's welfare state…..wake up call.

Vividly.  That is why I think that diversifying our trading base is essential.  Sure, let's keep doing business with the US, but becoming lock-step with them could spell disaster.

Anyone remember W5's (Eric Malling) showing us New Zealand as the nation that hit the "debt wall" and that Canada would follow in their shoes?  What a liar.  New Zealand took the WTO "medicine" and has plunged into a 15 year recession that destroyed their public education and health care systems.  The medicine proved worse then the disease.  We don't need that crap.

We can't support an industrial base for our standard of living with only 30 million people.  We export to keep our economic engine going.  But, why the intense focus on the US?  How many business people think it's "best practices" to rely on one customer?  We need access to other markets, for goods and services.  We also need to become less reliant on selling raw materials and begin selling at least a step or two along the value chain.  Sure, labour costs are high, but so is the effectiveness of that labour.

What about the idea of GDP distribution?  We are working towards a situation where GDP is very high and growing very nicely, but who cares if only a few folks benefit?  If we can earn huge amounts of GDP per person, why do we work so hard?  Where are the fruits of several generations of labour?  Crazy.

[Snowman]

“diversifying our trading base is essential� I agree 100%. Canada needs to wean itself off from the utters of the Fat American Pig…..but it is too easy for us to feed from. Most of our industries are geared up to feed the American Industry and consumers. This kind of foresight would be hard work, expensive, and require innovative approaches to market ourselves on a Global scale.
The Canadian economy is strong at the moment but not secure. We have a resource-based, dependent economy, in which resource depletion is a growing problem. This is a threat to the mainstay of our economic life. We have an unstable manufacturing sector whose main reason for survival is free trade and a depreciated loonie…..can we afford a divorce?.....or until death due US part.  
Who is going to step up and try and turn the titanic with their pinky…..good luck?

[Snowman]

Another bad report on our global competitiveness:
http://www.theglobeandmail.com/servlet/story/RTGAM.20041013.wcomp1013/BNStory/Bu siness/

Yet we continue to caulk up huge budget surpluses. Our dollar is rising and despite this our trade surplus is increasing: http://www.theglobeandmail.com/servlet/story/RTGAM.20041014.wtrade1014/BNStory/B usiness/

What is wrong here? What is the real story? Economists are essentially trying to predict the future. Based on the fact that no one can predict the future the specific objective originally forecasted will most likely not be achieved. Help us out here John.

Have patience with me….Wiffy is studying economics and business math this past year and I am having many debates with her.

[johngenx]

Another bad report on our global competitiveness:

Porter is pushing a one dimensional agenda that uses the cart before the horse theory that society is here to serve the needs of business.  Porter is a "God" among the business elite, and is studied extensively in most B-Schools for his business-first economic theory surrounding competitiveness.

There are some VERY valid points, including the need to invest in human resources (something BUSINESS is not doing, but expects the taxpayer to do, and at the sacrifice of health spending) and other things like poor long term management thinking.

I agree with Stanford when he points out that governments have adopted the neo-con agenda and cut social programs, run up surpluses, ignored high unemployment and kept inflation low and business sits back and cries out for more.  There comes a point when short term profits have to be sacrificed for investment.  But, until CEO compensation is unhitched from quarterly earnings and stock blips, nothing will change.  They'll just continue to expect the taxpayer to "compensate" and demand more of fewer workers.  The only way many management know to increase productivity is to lay off workers and scare theose remaining into doing the work of those no longer there.

What's happening is that government has done pretty much everything business has asked for, and they want more.  They want us, the taxpayer and employee, to compensate for mismanagement and greed.

As an aside, you want lively discussions?  Three of my neighbours are CEO's of large companies.  We have frequent block-party BBQ's and the discussion gets pretty heavy.  However, they did help me "derail" my own career.  All three have adult children, and all of them are complete losers.  Several are in prison, one for murder, and all are uneducated losers that depend on their parents for support.  Those that are free are in constant trouble with the law.  Why?  Parents obssesed with money and spending no effort at all on parenting.  So, they did SOME good, eh?

(One of my neighbours is the now-retired CEO of Luscar Mines who wanted to strip mine in Jasper National Park.  As the backcountry of Jasper is my second home, you can imagine how that went over...)

[ovr50]

I can imagine your back-yard BBQs, John, with your right-wing CEO neighbors and you as a leftish economist. I'm surprised you are all on friendly terms at all!!

[Drivesideways]

The only way many management know to increase productivity is to lay off workers and scare theose remaining into doing the work of those no longer there.

I totally agree with this, John.  I think if we have a productivity issue in Canada it is because we have generally taken a lazy, short-term approach to management, not because we have a lethargic workforce. Companies that convert capacity tied up with wasteful activities and processes into productive capacity, and then "sell" that capacity set themselves up for long-term success.

Thanks for that happy little glimpse into the lifestyles of the rich and shameless.  I'm glad my kids will have to work for a living.

[S60]

Canadians face some tough choices in the future world. With just 0.5 per cent of the world's population and 2 per cent of the world's economic output, we must focus on where to best apply our efforts so that we can maintain a high quality of life and sufficient sovereignty to pursue our own social, cultural, environmental and economic policies.

While both our population and economy should continue to grow, other parts of the world will grow faster. Our challenge is to make sure we have a place in this future world.

Even within NAFTA, we will represent a shrinking power. According to the U.N. Population Fund, Canada will add 7.4 million people between now and 2050, compared to an additional 35.3 million people in Mexico and an additional 111.7 million Americans.

Out of a 2050 NAFTA population of 588 million people, there will be 39.1 million Canadians, 140.2 million Mexicans and 408.7 million Americans.

To be sure, there are nations much smaller than Canada, such as Sweden, Finland, Denmark, Switzerland and the Netherlands, that enjoy a high standard of living and pursue their own way of life.

Over the next decade, the Windows of Opportunity scenario is the most likely outcome, the Conference Board argues. "The multilateral approach to global governance will become more attractive and institutions such as the WTO will succeed after the world experiences the economic limitations of delayed liberalization and possible protectionism and as China and India grow," the board predicts.

Therefore, it argues, "Canadian business and government should adopt strategies that do not lock Canada into a North American fortress with high walls and limit us from the potential gains of multilateralism."

This means that for Canada, the single most important trade initiative today is a successful completion of the Doha Round at the WTO, not the pursuit of a customs union, common currency or other features of a Fortress North America.  

Trade Minister Jim Peterson and our trade officials should spend 90 per cent of their time doing everything possible to advance multilateralism. This is the critical first step, though only the first step, if Canada is to be both prosperous and independent in the future global economy.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_T ype1&c=Article&cid=1097619016051&call_pageid=968350072197&col=969048863851

[Snowman]

“To be sure, there are nations much smaller than Canada, such as Sweden, Finland, Denmark, Switzerland and the Netherlands, that enjoy a high standard of living and pursue their own way of life.�

I have an interesting observation regarding the Nordic welfare states. In the mining game I deal with many individuals from Finland, Norway, and Sweden. I have had many conversations (over many glasses of Vodka) about lifestyles, work, mining industry, and life in general.

I am always puzzled by the fact that most of them would trade their left nut for a chance to come to Canada…..why? Nordic countries have always ranked the highest in standards of living, education, innovation, per capita incomes, health, environment…..and on and on. They have best social net fer dag fackers, unemployed (or unemployable), and retirement plans…..WTF!

Income advancement….There is very little opportunities to increase your income level based on what and how you perform. Everybody has been averaged out so there is more equality…..Wow!. Is this not what everybody wants!

[S60]

Nordic Countries Lead the Way in the World Economic Forum’s 2004 Competitiveness Rankings  
United Kingdom, Japan, Chile, Canada and Estonia all gain positions – US remains in second place  

“The Nordic countries are characterized by excellent macroeconomic management overall – they are all running budget surpluses – they have extremely low levels of corruption, with their firms operating in a legal environment in which there is widespread respect for contracts and the rule of law, and their private sectors are on the forefront of technological innovation. These countries prove the point that enhanced competitiveness and boosting the capacity of economies to operate effectively in the global economy is a multifaceted challenge requiring concerted actions on a number of fronts,� said Augusto Lopez-Claros, Chief Economist and Director of the World Economic Forum’s Global Competitiveness Programme.

The rankings are drawn from the results of the Executive Opinion Survey, a comprehensive survey conducted by the World Economic Forum, which this year polled over 8,700 business leaders in 104 economies worldwide. The survey questionnaire is designed to capture a broad range of factors affecting an economy’s business environment that are key determinants of sustained economic growth. Particular attention is placed on elements of the macroeconomic environment, the quality of public institutions which underpin the development process, and the level of technological readiness and innovation.  

http://www.weforum.org/site/homepublic.nsf/Content/Nordic+Countries+Lead+the+Way +in+the+World+Economic+Forum’s+2004+Competitiveness+Rankings

There is a rather simple reason IMO why Canada prefers dealing with the US marketplace, because it is culturaly similar. I have had many dealings with business associates, for example a company from Denmark selling goods from Norway to a Russian company. Talk about frustration.
The point being, when in negotiations between 2 or 3 different countries (cultures), and large sums of monies involved, it becomes very difficult to have all parties agree to agree.
I am sure this sounds too simple, to be such a huge stumbling block to make business between other countries, but this is a reality that one has to deal with.
Sure once a road or route has been established, and all parties have trust with all the players,the actions are much smoother, but for some corporations the time spent to establish these trusts and understanding is looked on a waste of time and effort.

I'm not saying Canada should not expand its business visions to other markets, just stating one simple issue that makes for diffcult communications with other foreign relationships.

Remember our society in North American has a far greater love or priority of the almighty $, which makes for very short sighted attitudes,which is some instances makes for untrusting attitudes with cultures in other parts of the world.

[Drivesideways]

Linky no worky.

Try this...

http://www.weforum.org/site/homepublic.nsf/Content/Nordic+Countries+Lead+the+Way+in+the+World+Economic+Forum’s+2004+Competitiveness+Rankings

(Message edited by drivesideways on October 15, 2004)

[S60]

Snowy, people still have a vision that North America is the land of milk and honey, is the main reason. One of the other reasons given to me in conversations with Finns,Swedes, and my wife (who is from Estonia) is the feeling of largeness here. What I can compare this last statement to is if you have ever lived in small town Canada, you know that everyone knows your business,who you spoke with last night on the corner street, who your Aunt Milly plays euchre with, and that you drink too much, or you don't support so and so soft ball team.
This is the feeling you have when you live in a small populated country, which can get on your nerves.
But in general a lot of people still consider North America a place where money trees grow.

[S60]

Try this one DSW, and then click on the 13Oct
news link
http://www.weforum.org/site/homepublic.nsf/Content/Press+Releases+by+Date

Another nice feature if working in Finland and you want to take, lets say a 1 or 2 year off, hey go ahead, your job will be here when you come back.I think these types of incentive are in place because of fear of losing your population base.

[johngenx]

But in general a lot of people still consider North America a place where money trees grow.

And they're wrong, of course.  You know why people don't cry out when we cut taxes on the rich?  Because most people, in the back of their mind, think that, somehow, someday, THEY will be rich too.  Of course, it's not true for 99.999999% of the population, but we still buy into this "anyone can become rich with hard work and determination" BS line.

BTW, my street is a real mixed bag.  We have three CEO's (well, two recently retired), a rich ambulance-chasing lawyer and three doctors.  BUT, we also have three teachers, three lefty academics and little 'ol me.  So, I'm not the only one defending the "masses" when the BBQ's get fired up...

(house prices have a HUGE range within the 25 homes on our street, from about 180K to $1.5M.)

[Drivesideways]

Fack....same thing happened to me.  Deleting post....

[safristi]

JohnX Kerry is it?....live richly..disparage the rich!!!...seems hypoCRITICAL...(99.999999%..can't achieve sh*t..BUT need Gov Nanny service...C'mon even you don't believe that)..just who is it that lives in all these fine houses with 2 cars in the driveway surrounded by lovely parks,schools,factories,Universities and retail operations and restaurants to fulfill our every
need!!?
   The NANNY state in those high rated countries
soaks up any Natural drive and squishes it down to the lowest common denominator....don't be the best that you can be just sit there and eat your state provided pablum and be nice....you can't show up slow Anderssen or he will be distraught..so go fiddle with yer thumbs while a committe decides your future.....JUST WHAT does Scandanavia give to the World that we all can't do without?...Nokia phones and Volvo's are neat and then what.....?Ohhh Nobel PRIZES....$1.3Million fer planting trees in Africa...peace prize to HeinRICH KISSassinger!!!!