2022 CPC Leadership Discussion: Et tu Redeux

[brihard]

Yep. Finance, services and tech can be done anywhere. But you can't drill for oil or grow crops and beef in significant quantities in the GTR.

They could be, but they’re not. Capital, people, and innovation go to where there are already economic incubators for same. Kitchener-Waterloo won’t suddenly see its tech sector uproot and move out west just ‘cause.

Oil and crops are both important sectors of our economy, but extraction and processing of basic materials do not suffice to drive a modern economy alone. A prosperous. integrated modern economy needs a lot of different sectors to make it resilient. Canada, fortunately, has that. Albertan oil fuels Oshawa trucks to move Saskatchewan grain to feed Kanata AI technology researchers that bring 21st century communications to test geomagnetic surveys and test wells in Athabaska.

 

[lenaitch]

Maybe the territory within Ontario shown below the red line on the map, will one day become America's 51st. state.

Either statehood, or a separate province within Canada.

That's it - I'm moving.

 

[QV]

They could be, but they’re not. Capital, people, and innovation go to where there are already economic incubators for same. Kitchener-Waterloo won’t suddenly see its tech sector uproot and move out west just ‘cause.

Oil and crops are both important sectors of our economy, but extraction and processing of basic materials do not suffice to drive a modern economy alone. A prosperous. integrated modern economy needs a lot of different sectors to make it resilient. Canada, fortunately, has that. Albertan oil fuels Oshawa trucks to move Saskatchewan grain to feed Kanata AI technology researchers that bring 21st century communications to test geomagnetic surveys and test wells in Athabaska.

The difference is that one could, while the other could not.

 

[Brad Sallows]

Extraction and processing ARE the driver. Everything else is larger, but without the bottom layer ("extraction"), the second layer ("finishing") and third layer ("services") don't exist. It's just that in our modern economy the bottom layer is much smaller than historically, and the upper layers correspondingly larger and much larger. Picture a pyramid which has inverted.

The constitution looks so reasonable to so many people right now, but I'm not impressed with the direction some leaders are going on freedom of information in the countries which are supposed to be on the side of freedom. "We just need to manage and curate information a little more, for the greater good."

 

[IKnowNothing]

So while we're artificially minimizing Ontario's voice to prevent GTA/Laurentian dominance, are we also artificially inflating south/midwestern Ontario's voice proportional to the GTA, or do we just disappear as we paint Ontario with one big brush?

Also @QV there's more to agriculture than ranch beef and vast expanses of low yield fields.

 

[brihard]

The difference is that one could, while the other could not.

It’s not clear what point you think you’re making here. Nobody in this discussion is suggesting discarding the prairies or their resource based industries.

Extraction and processing ARE the driver. Everything else is larger, but without the bottom layer ("extraction"), the second layer ("finishing") and third layer ("services") don't exist. It's just that in our modern economy the bottom layer is much smaller than historically, and the upper layers correspondingly larger and much larger. Picture a pyramid which has inverted.

What we have had indeed grown that way, but industry, tech, and service based economies can exist on proportionately much smaller natural resource bases than ours. Several economies larger than ours are much more based on industry and services and much less on primary resources. Japan and the UK come easily to mind.

The reality is that a hypothetically divided Alberta and rest of Canada would each do fine economically based on their own strengths, and continued economic interdependence and trade. It would simply be less efficient due to new barriers resultant from different financial systems and regulatory regimes having to interact.

 

[Brad Sallows]

What we have had indeed grown that way, but industry, tech, and service based economies can exist on proportionately much smaller natural resource bases than ours. Several economies larger than ours are much more based on industry and services and much less on primary resources. Japan and the UK come easily to mind.

Agreed. Now consider the potential fragility.

 

[GR66]

Extraction and processing ARE the driver. Everything else is larger, but without the bottom layer ("extraction"), the second layer ("finishing") and third layer ("services") don't exist. It's just that in our modern economy the bottom layer is much smaller than historically, and the upper layers correspondingly larger and much larger. Picture a pyramid which has inverted.

The constitution looks so reasonable to so many people right now, but I'm not impressed with the direction some leaders are going on freedom of information in the countries which are supposed to be on the side of freedom. "We just need to manage and curate information a little more, for the greater good."

Looking at those nations with the highest per capita GDP I'm seeing quite a mix of economies. The oil states of course are there, but there are also a number of countries in the top grouping (7 of the top 12) that are not primarily extractionist economies

• #2 Macao
• #3 Luxembourg
• #4 Singapore
• #6 Ireland
• #9 Switzerland
• #10 San Marino
• #12 Hong Kong

While it's true that Canada has traditionally been seen as "hewers of wood and drawers of water" it doesn't mean that we aren't able to diversify away from resource extraction as our primary sources of export income.

In fact, of our top 10 exports, five of the categories are natural resources (accounting for 38.1% of total exports) while the other five categories are manufactured goods (accounting for 23.6% of total exports).

I'd argue that we would be best served by getting even greater diversity in our economy so that having 23.8% of our total exports coming from a single sector (Mineral fuels including oil) doesn't leave us at such major risk of downturn when those commodity prices take a hit.

 

[brihard]

Agreed. Now consider the potential fragility.

In the context of this discussion, what specific fragility are you alluding to?

 

[Navy_Pete]

Yep. Finance, services and tech can be done anywhere. But you can't drill for oil or grow crops and beef in significant quantities in the GTR.

That's just massively ignorant. Ontario exported $20B in agriculture in 2021, and processes huge amounts of raw materials or sub assemblies into higher value goods. If you think they can just pick up and move multi-billion dollar factories with highly integrated supply chains, I don't know what to tell you.

And from the oil sands own info machine, they spent $6.5B and had support from 1300 Ontario companies between 2017-2019.

Economics & Affordability - CAPP | A Unified Voice for Canada's Upstream Oil and Gas Industry

www.capp.ca

If you think Alberta would be better off outside of Canada (with additional trade barriers etc) take a look at Brexit; the UK export market is tanking and it's a lot more effort to export something to what used to be open market access to the EU, and it's similarly harder to import things. And work visas etc etc are all things that require time and effort.

Things are integrated, and we're better off together were we are overall fairly self-sufficient.

 

[QV]

That's just massively ignorant. Ontario exported $20B in agriculture in 2021, and processes huge amounts of raw materials or sub assemblies into higher value goods. If you think they can just pick up and move multi-billion dollar factories with highly integrated supply chains, I don't know what to tell you.

And from the oil sands own info machine, they spent $6.5B and had support from 1300 Ontario companies between 2017-2019.

Economics & Affordability - CAPP | A Unified Voice for Canada's Upstream Oil and Gas Industry

www.capp.ca

If you think Alberta would be better off outside of Canada (with additional trade barriers etc) take a look at Brexit; the UK export market is tanking and it's a lot more effort to export something to what used to be open market access to the EU, and it's similarly harder to import things. And work visas etc etc are all things that require time and effort.

Things are integrated, and we're better off together were we are overall fairly self-sufficient.

I didn't say anything about Ontario. I don't know what you're all pissy about.

 

[Brad Sallows]

what specific fragility are you alluding to?

Trade hiccups, whether from natural causes or political interference.

 

[Navy_Pete]

I didn't say anything about Ontario. I don't know what you're all pissy about.

That's the area you said was a net drain on the country and should become the 51st state?

The flipside of that is raw materials can be imported from anywhere, you need the specialized equipment to do the processing, and the HR expertise for services and tech.

I think we're lucky to have both in the same country, so these regional fights are stupid.

 

[brihard]

I didn't say anything about Ontario. I don't know what you're all pissy about.

That’s not accurate. You did, in response to Mariomike:

Problem is, that space is a net draw on resources and not a net contributor. Doubt anyone would want it, it's just high maintenance with little output. But I like where you're going MM...

 

[QV]

MM posted a picture of a map... with a red line on it which was mostly the GTA and southern bits... better go back and look.

 

[brihard]

Trade hiccups, whether from natural causes or political interference.

Right. Which any economy is vulnerable to, hence the benefit of economic diversification. You would find a similar but probably more more serious fragility in an economy that is over reliant on one relatively narrow sector.I would contend that the Quebec City - Windsor corridor is, through sectoral diversity, well hedged against the supposed fragility you’re concerned about.

 

[IKnowNothing]

MM posted a picture of a map... with a red line on it which was mostly the GTA and southern bits... better go back and look.

~90-99% of the population of Ontario was below that line.
With it a significant % of Canada's Poultry, Dairy, Beef, Vegatable, and Hog production
With it 37 conservative seats
With it between 1/3 and 1/2 of all conservative voters

 

[Brad Sallows]

I'd argue that we would be best served by getting even greater diversity in our economy

Yes. Any ideas how we do that? My solution - and it's general - would be to remove most things which discourage people from doing things they want to do or encourage people to do things that otherwise would not be economically viable.

I suppose I must stress that I'm not claiming we need to increase the size of the bottom tier. For example, we have a tiny fraction of population directly engaged in agriculture compared to the past. This is good (ie. creative destruction). I do claim the bottom tier is critical. No company - no company town. A mid-sized city with 3 or 4 major employers loses one - substantial recession. Broad contraction in bottom tier - cascading effects through upper tiers.

 

[brihard]

MM posted a picture of a map... with a red line on it which was mostly the GTA and southern bits... better go back and look.

Yes, so nearly the entire population and economy of Ontario, which you even then acknowledged after I related how much of the national economy that chunk of Ontario comprises. It was very clear what you were talking about, and it wasn’t Timmins or Thunder Bay.

 

[QV]

Resources are more important. From there we can make everything else.

In the absence of resources, you have to hope they are available from somewhere else. Hope is not a valid COA.