The future is not bright, and will get worse than most of us expect.
A safe assumption for the next decade is that there will be limited economic growth.
There is little that individual governments can do to reverse this.
Specific problems awaiting us:
Unemployment in Canada will be high compared to the past decade, and rising.
Whatever new jobs do arise will be lower-paying and probably part time ‘McJobs’. Youth unemployment will remain very high, with fewer good jobs open to well-trained college and university graduates. Consumers will be reluctant to increase their spending substantially. Demand for our natural resources will be slower than in the past. The EU and US economic engines will crawl ahead in first or second gear only.
There will be little growth in the revenue flowing to the federal and provincial governments. Public sector debt will remain high and probably increase.
There will not be any rapid return to the fast growth of the past two decades.
Individuals will not borrow large sums of money in order to spend on consumable items in the expectation that they will earn more in future and be able to repay that debt. New homes will not be built at a fast click, and so will not drive the local economies. Good, high paying jobs will continue to flow out of the USA, the EU and Canada towards the less-developed economies, as companies continue to outsource manufacturing to countries with much lower wages and overall costs. The companies in the EU, USA and Canada will be allowed to continue this hollowing out process by their governments and the various trade treaties that have been, are and will be entered into.
The world economy will continue to be threatened by renewed financial instability because governments in America, Britain, Canada, the EU and other countries will not take the needed steps to control the casino capitalism that takes place in the ‘shadow banking’ institutions. Currencies will still be attacked by financial institutions through shorts on exchange values, as no adequate curbs will be taken to remove this piratical behaviour by the central banks of those countries. Massive sums of money will continue to flow out of countries into the tax-sheltered bank accounts of corporate shareholders, because tax havens will not be properly regulated to make such transactions transparent and regulate the flows (Mitt Romney will continue to ship his income into such tax havens and pay low taxes).
Realism and the Liberal Party:
The LPC is a party of the good times, as is the NDP.
The natural inclination of both these parties is to be optimistic, to assume that the good times will keep on rolling in, and to concentrate on either a brokerage function (the forte of the LPC over the past few decades) or on more and more income redistribution from the wealthy to the poorer citizens (the Dipper DNA demands this as its one and only economic Commandment). The Chretien/Martin government’s response to the earlier deep recession was to slash federal budgets substantially and download as much as possible of the funding problems on to the provinces and municipalities.
The Conservative Party under its out-of-touch leader, Stephen Harper, is sticking to its practice of whistling past the graveyard, hoping nothing untoward happens, and trying to blame bad things on the past governments. Meanwhile, the Tories continue to run a PR campaign aimed at framing Harper (remember his reluctance to stimulate the economy when the deep recession of 2008 hit us? And remember his advice to Canadians at the time to pick good companies to invest in because there would be good buys to be made as the recession hammered down stock prices? And his government’s ‘stimulus’ Action Plan of gazebos and trinkets? Expect him to know what’s going on and cope with it? Don’t hold your breath.)
Don’t expect Thomas Mulcair to change the outlook of the NDP to something akin to the Tony Blair centralization of policies. The NDP still has in the preamble of its constitution a socialist agenda aimed at nationalizing private sector assets, redistributing wealth, and demonizing the making of profit. And this is 2012! Marx and Lenin would be proud of the Dippers; they remain the closest to the views of those two gentlemen of all the modern industrialized nations.
The New Liberal Leader and Economic Realism:
It will be interesting to see if the candidates for leader spend time talking about the realities of the future, rather than simply playing Santa Claus and tossing out promises of presents galore to as many special groups as their teams can scramble to add to the list.
We would be better served if the candidates scrapped those gift lists and spoke about the realities of governing in a flat to slow growth era.
The Cat will be reading their proposals with interest.
Reduce the Hollowing-Out of Canada:
The LPC needs to reconsider the government policies (taxation and other), our legislation, and our mesh of international treaties, to determine what needs to be changed to begin the retreat from the hollowing out policies of the past, to policies and treaties that allow good, well-paying, real jobs to be created in Canada, and in the USA.
We need to accept that our small population means that major manufacturing industries are unlikely to spring up in Canada, and to look elsewhere for new jobs in Canada.
Educating our People Assets:
We need to re-examine our policies regarding the education of Canadians, and place emphasis on two major thrusts: (i) a significant move towards technical training (ala Germany with respect to manufacturing) and knowledge industries (software development, and internet products); and (ii) making access to post-school education accessible in terms of spaces in colleges and universities, and funding students.
Our Natural Resources:
We need to develop our natural resources (oil and gas, tar sands, hydropower, mining, lumber) as extensively as possible, consistent with proper environmental protection, and to ensure that we can increase substantially export of those resources to other countries over the next five and more decades. At the same time, we need as a party to have policies which require and assist value-addition to such raw resources within Canada, before they are exported, so that good jobs within Canada are created.
We need to re-examine the plight of the unemployed and under-employed, and ensure that their basic needs are taken care of, and that we have constructive, effective and adequate training mechanisms in place to enable them to upgrade skills and find new jobs to replace the ones they have lost.
Reduce Casino Capitalism:
We need to increase our regulatory provisions to prevent further casino capitalism through the shadow banking system (such as derivatives, predatory currency and stock practices, and financial innovations that create little public good but siphon off much needed resources while increasing the risk of systemic instability).
Boost Immigration substantially:
We need to substantially boost our immigration targets, so that our population grows and new jobs are created through the need for homes, clothing, food and infrastructure.
We need our levels of government to invest in and support the investment in infrastructure projects which create jobs within Canada.