Thursday, February 12, 2009

First Trade Deficit in 33 Years?

Nice. Oh well. Thank God we let that budget pass and kept these Conservatives in government to destroy what's left of Canada for yet another year. I wonder what they'll sell off next. A nuclear plant maybe?



Big Winnie said...

Harper and his buddies will attempt to sell off provinces that
don't (based on the polls), align with his ideology. Asking price: A Majority!!

Christopher N said...

You referenced an article where it was written

Canadian exports of everything from oil and gas to autos and grain fell, mainly because the U.S. economic slump deepened.

As recently as a half-year ago, ballooning oil, grain, potash and other commodity prices allowed the country to rack up hefty $6-billion monthly trade surpluses," CIBC World Markets economist Avery Shenfeld observed.

I am not the biggest fan of our current government in power, or any of the parties for that matter but you seem to imply that the trade deficit is entirely due to the conservatives being in power.

Yet Canada has no control over many of the factors that go into creating a trade surplus. For example, we can not force the U.S. back into a housing boom, thus buying Canadian goods such as lumber. We can not make them buy Canadian goods if there is no demand.

Oil is at $36 a barrel, a lot less then half a year ago.. If I recall $100 higher (but not sure on that number) so right there we take a huge loss on our exports.

Auto industry, there is a reason that the GM plants have been sitting idle, cars are not selling as they once were in the US. I read figures that said 8 of every 10 cars made in Canada were made for the US market.

You then go on to talk about the conservatives selling off a nuclear reactor (I know you are speaking facetiously) but I only see a week link between the two, used as an excuse to bash, as opposed to providing constructive criticism or suggest other courses of action.

I can not really comment on solutions as I don't have the knowledge to do so, but since you are criticizing, I would assume that you have ideas of what could have been done better.

What would you have suggested that the government do to have avoided this?

What do you suggest they do now to put trade surplus back into the green? - Do we need to be in the green?

What is it that the conservatives did in 3 years of minority power that created this situation? Had the liberals been in power, would we not be in the same boat?

I don't see how any other party in power would have avoided this, as Canada does not control the value of world commodities, nor can it force other nations to buy our goods.

We could try to make our goods cheaper, but to do so we may need to take cuts in pay as well as reduce corporate taxes. (With the idealist dream that the difference would be passed onto the consumer and not pocketed by the execs.)

James Curran said...

Well Chris, it appears our Minister of International Trade finally figured it out: Let's go global. Hey! There's an idea!

roblaw said...

Excellent post Chris - and while I have supported Harper as a Conservative, I as well, of late, have posted my own complaints about recent moves made for no good reason but to get elected..

The point remains, however, that the last trade deficit was under Trudeau.. and was that a Liberal failing?

Truth is, Canada has only a marginal impact on global economic issues, and while a greater diversification of trade would have helped divorce us from the American meltdown, the fact is that the meltdown is global, so we were going to hurt regardless of who was in government.

Let's at least concede that.

Better we do what we (not Conservatives, but Canadian government as a whole) do well, which is maintain a strong and conservative (small "c" James) banking system, refuse the banks' drive to further consolidate (can you say AIG?) and stay the course until matters turn around.

Meanwhile, if we're putting money out there, perhaps concentrate on education, getting us ready for the new economy, rather than throwing money to the wind to appease the two biggest special intrest groups in this country, being organized labor and big business.

James Curran said...

The point is, until recently (read just the past 8 months) there has been no concerted effort by this government to extend trade missions beyond this very continent. At least Martin believed in global positioning a la Maurice Strong.