Canada West Foundation Blog

by Robert Roach

There are many ways to ruin a cocktail party. One tried and true way is to bring up the environment: “Are you aware that the pork in that pig-in-a-blanket you are eating creates toxic run-off that contaminates our rivers?” “No, but it sure is tasty!”
This is why we did not start this series of articles on changing Canada’s economic DNA with a piece on the importance of thinking and acting green. However, while it may be a buzz kill, addressing the environmental piece of the economic competitiveness puzzle is critically important.

This is especially true because we are nowhere near where we need to be when it comes to environmental efficiency (see what we mean—what a buzz kill). We have an economy that is really good at exploiting the environment and we are trying to stick this square peg into a round environmental hole. There has been progress: recycling has become commonplace, dumping industrial waste directly into rivers  has been banned, and we have greatly reduced the use of ozone-depleting hairspray. Despite these and other minor adaptations, our basic economic DNA is black and red (as in black and red ink) rather than green.

The point here to not to be ashamed of what we have accomplished as a civilization. The modern economy and its roots in transforming the land and harvesting the earth’s resources have taken us out of the stone age. For most of us, at least, this is a good thing.

Nonetheless, we don’t want to become an economic dinosaur staring into a future where we are just a bunch of bones in a museum. We have to move beyond tinkering at the margins of how our economy operates and embrace a completely different approach to how we weld our economy with the short-, medium- and long-term health of the planet.

The first thing we have to admit is that this will not be easy and it will not come without short-term costs. It will pay off, but like anything worth having, it requires sacrifice. There will be winners and losers, and the losers are not going to be happy. If we plan for this rather than think that the transition to a green future will be painless, our chances of success will be much greater.

The second thing we need to understand is that one-off reactions to the crisis of the day—be it greenhouse gases, oil spills, birds getting chewed up in wind turbines, or the disappearing rainforest (remember when we cared about that?)—will not get the job done. It is like training a duck not to quack—you might have some success, but it would be better to change the duck’s genetic code so it has no need to quack.

As an economy, we need to change the basic equation of exploiting land, labour and capital to a much more complex algorithm that incorporates the value of ecological goods and services, establishes the primacy of creativity and innovation, and erases the notion that “protecting” the environment is either a cost or a moral obligation. Sustainable practices must be as natural as breathing. If they are only the result of laws, guilt or religious fervour, they will always be on shaky ground and open to fierce opposition

We need business practices, investment strategies, production systems, accounting methods, entrepreneurial norms and market signals that integrate both the efficiencies that can be gained from green economics and its respect for the natural processes that sustain life.

A change of this magnitude is a massive undertaking, and for this reason alone it cannot be centrally controlled. It has to happen at the level of the individual firm, investor, entrepreneur, worker, parent and teacher.

Two things make this transformation increasingly likely: first, there are many potential advantages to a greener economy including lower production costs and higher profits; new jobs in the green services sector; a decrease in onerous government regulation and the related compliance costs; and less money spent on reacting to environmental challenges (thus leaving more money in the hands of consumers).

Second, we know more today that we used to. Some will say that we have only rediscovered what some ancient cultures already knew, but either way, the next generation of Canadian entrepreneurs, investors, managers and workers are much more savvy about the need for, and value of, greater balance between harvesting the earth’s bounty and ensuring that it continues to be bountiful.

Canada can take the lead. Or, we can become the dinosaur as Germany, the US, and yes, even China, push us out of the way.

This article is based on a forthcoming book entitled “Rewriting the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach. Robert Roach is the Senior Researcher at the Canada West Foundation and Todd Hirsch is the Senior Economist at ATB Financial.

by Robert Roach

This post is based on a forthcoming book entitled “Re-Writing the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach. 

In the bad old days when people were sent to poorhouses for falling on hard times, there was a job called “picking oakum.” Prisoners were forced to untwist old bits of hemp rope by hand until their fingers bled. The resulting product was then used for other purposes such as stuffing mattresses. As such, picking oakum was a value-added industry: a raw material was processed and, in turn, value was added and “jobs” were created.

 It is easy to imagine a local oakum producer stressing how much better it is to untwist the hemp locally as opposed to exporting it in its raw form. 

Picking oakum is an extreme example, but it highlights the need for economic strategies that go beyond simply promoting more value-added activity. A new meat packing plant, bitumen upgrader or auto parts factory are not going to maintain Canada’s economic prosperity in the global economy of 2010 let alone 2025 or 2050. We have to aim higher—much higher—than the modern equivalents of picking oakum. 

This does not mean that we should not make more pasta, furniture and or other value-added manufactured products here in Canada when and where it makes economic sense to do so. What it means is that we need to fully understand that “making things” (especially things that our competitors can make cheaper) will not keep Canada prosperous. 

For example, we have lots of oil and natural gas that we could turn into plastic patio chairs. But the reality is that, even after shipping the chairs across the sea to North America, the Chinese can still make plastic patio chairs cheaper than we can (assuming we don’t try to compete by dramatically lowering wages or loosening environmental standards—something we definitely do not want to do). As a result, when some guy in Florida needs a patio chair, he buys the one made in China. And at $10 each, you have to sell a lot of patio chairs to fuel your economy. 

So where does this leave us? Believe it or not, it leaves us in a very enviable spot. The Chinese officials who know that their country’s long-term economic future will be bleak if it involves making stuff that ends up in dollar stores would love to have the advantages that we have in Canada right now: a modern service-based economy with a high level of education, a relatively low level of poverty and infrastructure galore. We have everything we need to aim for the top of the global value chain. 

The good jobs of tomorrow and the industries where we have a chance to develop a comparative advantage are largely at the upper end of the value chain. You don’t want an army of workers assembling iPads. What you want is workers who design iPads and other marketable innovations. You want businesses that not only figure out how to extract oil and gas here in Canada, but that sell their expertise to drilling companies around the world. 

We might make lots of pasta out of our wheat or we might ship it elsewhere for processing, but what we really want is to corner the market for designing the strains of wheat and other staples that will help feed the world’s growing population. 

We have the ingredients—wealth, education, previous successes, entrepreneurs, great cities and so on—to play at the upper end of the value chain, we just need to make this our focus. Exporting natural resources and “making stuff” will remain key components of our economy, but if we don’t aggressively go after the profits and jobs to be found in medical research, education services, financial services, biotech, IT, entertainment and so on, we will find our standard of living falling as our competitors get better and better at both the bottom and top ends of the value chain. 

The Canadian economy needs to be driven by ideas, innovation and the practical knowledge that takes ideas and innovation and turns it into good jobs and economic growth. 

One caution: the bursting of the dot.com bubble showed us that economic activity at the top of the value chain still has to have real substance. If it is just a bunch of young people playing pool in the lunch room and getting paid in soon-to-be-worthless stock options, it won’t work. We need good ideas that are turned into real innovation and real value. We have the ingredients to do this, now is the time to stir the pot and make it happen. 

Robert Roach is Senior Researcher and Director of the West In Canada Project, Canada West Foundation and Todd Hirsch, is Senior Economist, ATB Financial.

In Memoriam: David E. Mitchell (1926-2010) 

The Canada West Foundation was very saddened last week by the loss of long time supporter, friend and member David E. Mitchell. Mr. Mitchell was a patron of the Foundation, expressing keen interest in the research we were doing and always encouraging the Foundation with thoughtful words of support. 

The Canada West Foundation was very proud to have Mr. Mitchell, a man of integrity, intelligence and wisdom among its Members and he will be missed. 

Mr. James Gray, Honorary Chair of the Canada West Foundation, a close friend of Mr. Mitchell shares his memories of this remarkable man. 

I first met Dave Mitchell in the late 1950s. He was running the engineering and production department at Great Plains Development Company and I was a summer student in the exploration department. Within a year the company’s then CEO, Nick Nichols, drowned in a swimming accident in Hawaii and Dave was prematurely thrust into the responsibility of CEO in his early thirties. 

 From that point, Dave never looked back. His technical knowledge together with his strategic vision were of the highest calibre. What set Dave apart, however, from other industry leaders was his outstanding ability to connect and communicate with virtually everyone he met. He valued family, friends, community and country and in all aspects he “walked the talk.” 

Once Dave identified young leaders he loaded them with responsibility and offered advice and support—he believed in strong teams. Dave also believed strongly in community and country and served both with resources and personal commitment. 

Finally, Dave believed deeply in both family and friends. He was immensely proud of his family and was always loyal to his friends. Dave had every right to be proud of his accomplishments but he never, ever brought praise onto himself. At every opportunity he insisted that others be congratulated, that others be given the credit. Dave is one of the very few who truly left this place substantially better than he found it. 

I have always considered myself among the blessed to have known Dave Mitchell for over 50 years. We have lost a dear friend and a great citizen. 

 (David E. Mitchell was a Member of the Canada West Foundation from 2003-2010)

“The People and the deer fused in my mind, an entity. I found I could not think of one without the other, and so by accident I stumbled on the secret of the Ihalmiut.”

I was reminded of this quote from Farley Mowat’s book, People of the Deer, when reading about the debate currently taking place over the impact of seismic testing on the marine wildlife in Lancaster Sound and, by extension, the northern communities that rely on that wildlife.

The connectedness of people with their natural environment, including the wildlife, is important and something you can’t put a price on. This was the message of Nunavut judge Sue Cooper and one of the reasons why she blocked a seismic study of Lancaster Sound. She states, “The loss extends not just to the loss of a food source, but to loss of a culture. No amount of money can compensate for such loss.”

Lancaster Sound is a body of water north of Baffin Island in Nunavut that is rich with marine wildlife. It is the home of narwhal, walrus, beluga whales, seals and polar bears and is an important migratory route. The abundance of life is so substantial there it has been dubbed the “Arctic Serengeti.” It is also an area that has yet to be explored in terms of its mineral and resource wealth.

That is the aim of Natural Resources Canada, which is interested in conducting a geo-mapping program in order to “increase our knowledge of the geology of the North.” This seismic involves firing an air gun underwater to gather data. This process, they say, presents very little risk to wildlife. The Inuit, however, disagree and argue that previous seismic testing resulted in death and hearing damage to wildlife, and caused whales to alter their migratory route.

Many important questions remain unanswered in this case, including: What is the scientific evidence of the impact of seismic on wildlife? Was the consultation process with the potentially impacted communities sufficient? And, what is the intended use of the geological knowledge obtained through this seismic testing?

What is interesting to me isn’t whether blocking the seismic was a good or bad decision. What’s interesting is that there was an acknowledgement of the larger philosophical concept that place matters—that individuals, communities and cultures’ sense of self is informed by their natural environment and you can’t impact that environment without impacting the people within it.

It is easy to forget sometimes that the value of the natural environment can’t be readily quantified in economic terms—although various solutions from Bentham’s utilitarianism to Bhutan’s Gross National Happiness indicator have been attempted. The valuation difficulties are not easily overcome, as the case of Lancaster Sound illustrates. It is possible to conduct seismic testing to learn about the type, quality and quantity of mineral deposits on the bed of the Arctic Sea and assign a numeric value to it; but, is it possible to assign a price to the value of a preserved natural environment to the culture and identity of the Inuit?

Having a connection with nature is important for all people, not just aboriginals or northerners. A love of nature is one of the few things that unites all Canadians. For example, 98% of Canadians state that they view nature in all its variety as essential to human survival, 90% consider time spent in nature as children as very important and 82% say nature has very important spiritual qualities for them personally (Environics International, 1999).

This connection, or bond, with the natural world is especially significant for western Canadians whose psyche and character are informed by the expansive lakes of Manitoba, the broad prairies of Saskatchewan, the jagged teeth of Alberta’s mountains and the rhythmic ocean on British Columbia’s shores.

This means that whenever we disrupt the natural environment we need to be asking: what is the impact of a disrupted, polluted or otherwise unhealthy natural environment on our sense of self and community? Or, to put it another way, if you woke up tomorrow and the salmon stock had collapsed, the lakes were too polluted to swim or boat in and grizzly bears were extinct, how would that impact your understanding of what it means to be western Canadian?

As we search for the correct balancing point between economic development and environmental conservation as a region and a nation, we need to keep in mind that the natural world matters to our sense of self. Although both the economy and the environment are important there are some variables, such as identity, that you can’t readily put a price on. As Mowat notes, identity and nature are fused, they are an entity.

Or, ‘Hello India’ as ‘Namaste’ is the traditional Hindi greeting.

Why an Indian greeting for India?

This past Sunday, Indian flags were flying across Canada to celebrate India’s 63rd year as a sovereign nation. This past June, during the G20 Summit, Prime Minister Stephen Harper hosted a formal dinner for Indian Prime Minister Manmohan Singh. After roughly forty years of cool (some might even say cold) relations between India and Canada, events such as these symbolize a marked warming, and celebration of Canada’s relationship with India. India currently ranks 10th amongst Canada’s trading partners but, it is relationship which is proving increasingly important to Canada for a variety of strategic, and trade reasons including: its potential as an expanding market for Canadian goods, and an opportunity for Canada to expand its knowledge economy.

Acknowledging India’s potential as a new market for Canadian goods is nothing new. India is home to a population of 1.25 billion (second only in total population to China) of which an increasing number are middle class. India’s growth has been no less than astounding; with a GDP growth rate that has averaged over 10% the last few years. Both of these facts have contributed to increases in commodity trade by 23%, 116% and 306% in Manitoba, Alberta and Saskatchewan respectively over the past decade.

But, where the potential really lies in doing business with India is not in our lentil and wheat production. India offers a great opportunity for Canada to increase its trade of knowledge and expertise. This is especially apparent in the areas of resources and energy production and infrastructure.

At current rates of economic growth India is demanding that its own energy sources increase production by more that more than 4.3% a year. However, it is faced with a growing carbon footprint and a depleting water source.  Canada can help with a focused and bottom-up approach to share expertise and technology in areas including hydro-electric power and nuclear energy, areas which Canada is a long-time global leader in research and development, as well as biomass and clean coal technologies, where Canada is working towards becoming a global leader. The added bonus being that if India chooses to, while it is developing these energy capabilities, it has the opportunity to develop energy infrastructure that is cleaner than the energy systems in many western countries, something which is an environmental benefit for all.

In regards to infrastructure, one of the biggest challenges facing India and its ability continue on its current trajectory of tremendous growth is its domestic infrastructure, or more accurately, its lack thereof.  But, every problem has a silver lining and in this case, it’s one that offers western Canada opportunities. After all, who is the world is better at building pipelines than western Canadian companies?

At a recent conference put on by Calgary Economic Development (CED) in conjunction with the Indo-Canadian Chamber of Commerce (ICCC) entitled “Doing Business in India”, I had the chance to hear of one such story of trade expertise. Enbridge Technology Incorporated’s Bill Trefanenko told how Enbridge was recently contracted out by an Indian firm to help it develop a gas pipeline to take natural gas from India’s south east coast clear across the country to where they refine petrochemicals on the west coast.

These are just two examples of where western Canadian-Indian knowledge trade has potential.

But, if we are going to be able to take advantage of these opportunities we need to ensure that we build the cultural bridges necessary, we need to better understand India’s business culture. Over 925,000 Canadians identify themselves as Indo-Canadian.  We have the connections, we need to use them! Calgary Economic Development and the Indo-Canadian Chamber of Commerce’s conference was a good start towards this.

Other recommendations for how we can understand and improve business relationships with India include enhancing our focus on building bi-lateral linkages. This could include trade delegations, perhaps similar to the New West Partnership mission that went to Shanghai this past spring. Research and educational institutions also have a large role to play in tapping the Indian market for educational services, and building institutional linkages.

So, we have some work to do if we are going to take full advantage of the opportunities India presents when it comes to western Canadian trade.  But, we would be amiss, when we looked west to only look as far as China’s shores.  Who knows how far western Canadian trade with India can go, and we’re not going to know unless we take the opportunities that are in front of us here and now.

Posted by: Candice Powley

This post is based on a forthcoming book entitled “Re-Writing the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach.

In much of the thinking on economic competitiveness, there tends to be an emphasis on science, math and applied technical skills. Without question, these are essential if Canada’s economy has any chance of success in the coming years.

But a test tube can solve no problems. A hammer can build nothing. And even the most powerful computer can’t create a thing. What each of them needs is a human brain to operate them to solve, build and create. Obviously, knowing how to use a test tube, a hammer, and a computer is essential, but what’s really needed is clever ideas that apply the technology to solving 21st century problems. We don’t need a fountain of youth; we need a fountain of smart!

A few years ago, Daniel Pink authored a book entitled “A Whole New Mind.” He argued that linear-thinking and “left-brain” occupations such as medicine, engineering and computer science contributed significantly to our economic wealth in the 20th century. But increasingly, because of competition from Asia and the advances in computing ability, what North America’s workers really need in the 21st century are more “right-brain” attributes—skills such as imagination, creativity, intuition and relational abilities—to complement our linear thinking.

The problem now is that so much has been written on the importance of “the creative culture” that some of us are growing frustrated with not knowing exactly what “creative” means. Does it mean that our cities need to be artsier? Will trendy cafes and poetry readings bring prosperity? Do we really need to turn our old warehouses into avant-garde theatres or face economic extinction?

Not at all. Art and culture have extremely important roles to play in the economy, but the notion of creative students and creative workers goes far beyond Bach, Shakespeare and Monet.

Creativity is an essential element in every occupation. In its broadest definition, creativity is the application of a clever idea to solve a problem, seeing something in a new way or making something unique. Even something as simple as putting a telephone book under your computer monitor to raise it a few inches is a creative (albeit very basic) solution to a common problem.

People say all the time, “Oh, I’m not creative.” But in fact, everyone is creative, or at least has the potential to be. And most of us have no idea of the creative capacity we possess. There is not a single sector of the economy that would not benefit from clever solutions to problems, new ways of seeing things and unique products.

What can we do, then, to foster a clever society?

When it comes to our children, the answer is almost comically simple: stop pounding the creativity out of them. Much of our education system over the past century had sadly evolved into a system that practically punishes creativity. Thankfully, huge strides are being made by some of Canada’s most thoughtful education practitioners in trying to correct that.

One example of how to foster children’s creative abilities is found at the Calgary Arts Academy. This K-9 charter school is not an art school; rather, it’s an arts immersion school that delivers the standard provincially approved curriculum through the arts. Teachers work alongside artists to design the program. Kids learn math through music and dance, for example, or social studies through drama. Don’t just make the kids read about and memorize types of cloud formations—get them to write a play and act like clouds. By doing so, they engage their whole brain in learning the defining characteristics of different cloud types.

Being clever must also extend to the workplace, and here we need an effort from both employers and employees. All sorts of courses and seminars are offered to stimulate the whole mind and train ourselves to think critically. At the very least, an emphasis on correcting basic literacy deficiencies would go a long way in making the workplace safer and more productive.

Certainly there are many who will quickly dismiss these activities as a waste of time and money. But activating all parts of the human brain is no silly diversion, and it could do amazing things to help Canadians work more productively, get more enjoyment out of their jobs, and find clever solutions to the problems they encounter in the workplace.

All of us are clever in ways we can’t even imagine, and exercising that cleverness is an economic imperative. Clever kids aren’t the ones who simply memorize information; clever kids are the ones who learn how to learn. Clever workers find simple solutions to the complex problems they encounter in their daily jobs. And the future of Canada’s economic prosperity needs them both.

Robert Roach is Senior Researcher and Director of the West In Canada Project, Canada West Foundation and Todd Hirsch, is Senior Economist, ATB Financial.

Posted by: Rob Roach

This last month celebrations were held for the 125^th anniversary of two significant and unrelated events to western Canada: the creation of Banff National Park and the Métis Northwest Rebellion led by Louis Riel.

If you aren’t familiar, here’s a little bit of the history:

• Banff National Park was created in 1885, the first national park in Canada and the third such park in the world. The park was created to protect the Banff hot springs, which had been discovered by two railway workers in 1883 and were the focus of conflicting commercial plans. Instead of allowing the hot springs to be developed, John A. Macdonald declared the area a protected space. Banff is now one of the primary tourist destinations in Canada and the world, receiving almost 5 million visitors a year.
• The Northwest Rebellion was a brief and, ultimately, unsuccessful uprising by the Métis people. It was some 15 years after the Red River Rebellion, but the issues were much the same. The Métis people were concerned about the distribution of land following the influx of immigrant settlers, the effects of poverty and the fate of the buffalo, which were being hunted to extinction. There were numerous skirmishes and battles—including the Battle of Batoche, where Métis people gather annually in July to celebrate their culture and heritage—that resulted in the defeat of the Métis people and the hanging of Louis Riel.

Both of these events are significant to the character and development of western Canada and for this reason alone they are important to remember. It also strikes me that the larger issues they represent are still ones that we are dealing with as a region today. Namely, we are still trying to figure out how to balance environmental conservation with economic development, the rights and roles of aboriginal people in western Canada and everything in between.

Today, Canada’s environmental record is one of the worst among OECD countries and the West contributes substantially to that record. Across 25 environmental performance indicators used by the OECD, Canada is not among the five best countries on any measure and is among the five worst on 17 of them. We have a resource-based economy that relies on high energy and water inputs and extraction techniques that are detrimental to environmental conservation. There is an ongoing debate between industry, governments, NGOs and citizens on precisely where the balancing point between economic development and environmental conservation should be.  One of John A. MacDonald’s legacy from this debate was the creation of Banff National Park. I wonder if we can hope to be as successful in carving out a positive legacy from today’s environmental debate?

Similarly, across every measure of social and economic well being, the Aboriginal population in western Canada fares poorly compared to the general populace. According to census data the Aboriginal population is three times as likely to not have a high school education, more than twice as likely to be unemployed, roughly half of all Aboriginals survive on an annual income of $10,000 or less, over 20% report some form of physical or sexual abuse, they are much more likely to be incarcerated, have a diabetes prevalence rate of 3-5 times the general populace, and there are many other equally depressing statistics.  Many of these statistics reflect the symptoms of poverty, the same thing Aboriginal leaders were concerned about in 1885.

My point is that we have been dealing with the similar issues around the environment and Aboriginals for 125 years. While we pause to recognize these historic events, now is perhaps also a good time for new, out of the box, thinking and creative approaches. We should be looking very carefully at the policies and programs of other countries (e.g., Australia and New Zealand) with similar challenges to find and implement their best practices. Maybe we should create a policy platform to educate and then employ aboriginal people in environmental conservation. That might help both the social conditions of Canadian aboriginal peoples and our environmental record.

Whatever we do, we need to get serious about it now, 125 years seems long enough.

Posted by: Shawna Ritchie

Only rarely does the Canada West Foundation as an organization express a view on policy issues. The norm is to speak through our research reports and their authors, and to avoid institutional endorsement of particular policy options or views. However, the debate over the long-form census is an exception, a case where the issues seem so important that they call for an institutional response. Thus in a variety of forums, the Foundation has joined with other Canadian think tanks in calling upon Prime Minister Stephen Harper’s government to reverse its decision to make the long-form census voluntary.

But why has the Canada West Foundation taken up this crusade? In part the answer comes from our methodological experience and expertise; we know that a voluntary census will not produce reliable data. This is not an opinion; it is as close to a fact as one can get in the complex world of statistical analysis. The government’s argument that a voluntary census will work if mailed to more people and backed up by massive advertising is simply wrong. We will pay more for less, which seems an odd strategy in this fiscal environment.

But does it matter if data quality is corrupted? I would argue that in a knowledge-based economy, paying more for poorer data makes no sense. We need more rather than less evidence-based policy design, and the movement away from the current long form census is movement towards policy impoverishment. It is also a signal to the world that we don’t take ourselves seriously, that we’re content to rely on hearsay and guesswork.

All of this, of course, may seem rather abstract, so let me give you a concrete illustration from the Foundation’s work. Part of what we do involves mapping patterns of demographic change in a highly dynamic, growth-driven region of the country. We know that the region has been transformed fundamentally since the census in 1971, the year the Foundation was created, and we believe that understanding and mapping that transformation is fundamentally important in coming to grips with the future of the West in Canada, and within an increasingly competitive global economy. Self-knowledge is not everything, but it is an important start.

However, if we move to the short-form census alone, or coupled with a deeply flawed voluntary long form census, we will no longer be able to map the demographic evolution of the West. When asked to describe how our linguistic and ethnic diversity is changing, to map the migration of Aboriginal peoples into urban centers, to understand patterns of integration, assimilation and migration for new Canadians, we will have to fall back on guess work and assumptions. I can’t believe that we will settle, that we should settle, for “by guess and by golly” when we can do so much better.

Now, none of this means that the status quo should be exempt from criticism. We could certainly eliminate the threat of jail for failing to complete the census, a threat that has never been carried out in any event. We can and should review the content of the long form. And, if we’re smart, we can further insulate the Census operation from political influence.

In short, we can do better, but the long-form census is one baby that should not be thrown out with the bath water.

Posted by: Roger Gibbins

Trying to get a handle on BC business conditions now is a little bit like nailing jelly to the wall.

The recent economic numbers look pretty good with employment and output both staying in positive territory and doing better than in Canada as a whole.

The unemployment rate, at over 7%, is higher than we might like, but still better than the national rate. The number of people working has been rising, with unemployment only staying high because better times are encouraging more people to enter the workforce. Problems of labour shortages are now just beginning to arise and, so far, only in very specific cases. For example, CP Rail is now very short of workers in the smaller towns in both BC and Alberta with 200 vacancies.

The BC list of major projects continues to grow as the number of new projects being added to the list exceeds in both in quantity and value those that are completed. Even though not all the proposed projects are firmly nailed down yet, this picture is very different from the post-Olympic falling off a cliff that some were forecasting.

To the great relief of all Vancouver and Lower Mainland home owners and to the great disappointment of baby boomers elsewhere who were hoping to retire here, housing prices seem to have stabilized in the metro areas of BC at levels not too far below what they were at their frenzied peak. This means that the net worth of households and individuals is back where it was before the last recession.

Retail sales (including new car sales) and wholesale trade are moving up, but not as strongly as they were in boom that preceded the last recession.

Finally, most small and medium sized businesses and professional practices are managing to keep busy and are optimistic about the future. This last point should be treated with caution. Operators of smaller businesses are almost always optimistic.

However, there is more happening in BC than the relatively good news outlined above. Tourism is one sector that has declined, with US visitors down about 5% and overseas tourists down 1%. After a brief up tick, lumber prices are soft again, seeing no signs of life yet in the US housing market. Though still basically healthy, prices for energy and other commodities have declined from their peaks. Those who deal with new stock issues or new housing developments are not being overwhelmed with work.

Apart from or maybe in spite of all the numbers, there has been a change in how people feel—the animal spirits that economists talk about that determines how we act. People and businesses are being more cautious now that markets are not continuously rising and few jobs are going begging. Families are being more careful and are thinking about saving rather than spending. Look for a very modest increase in back-to-school sales this year.

Businesses of all types and sizes are seeing their customers becoming much more price and value conscious. No longer can a supplier tell a customer or a client “good, fast, cheap—pick two”. People are learning from Wal-Mart, one of the biggest buyers as well as one of the biggest sellers in the world. In order for Wal-Mart to offer its customers the lowest possible prices, it must get the lowest possible prices from its suppliers and will examine suppliers’ books to insure that their costs and margins are such that they are earning just enough to be able to stay in business.

All purchasers, whether they are deficit-ridden governments, more cautious consumers or businesses that are themselves under pressure, are now sharpening their pencils to get the maximum value for the lowest price. Whether in construction or consulting, very competitive bidding is now the norm. Professions are not immune. Corporations are now questioning their law firms about the venerable institution of billable hours and seeking a more certain and cost effective way to get their legal work done.

It is no longer a seller’s market whether you are providing goods, services or your own time in a job. But there is still a reasonable market out there for the goods and services that our businesses can turn out if we are efficient and effective. Big and small organizations in BC and Canada are now getting back to business and showing how productive they can be. It was the lack of productivity and cost-effectiveness that has hindered Canada’s competitiveness in the past. Today’s market challenges and the positive way the business sector is responding to them should result in great increases in productivity and competitiveness in the future.

Posted by: Roslyn Kunin

We are now accepting applications for two positions in the Jim Hume Student Internship Program for the September to December 2010 term.  The application deadline is 5pm (MDT) Friday August 20, 2010. Only applicants selected for an interview will be contacted.

Two internship positions are available. The internships are open to current students and recent graduates (up to 18 months) of a Canadian post-secondary institution, with majors in economics and/or political science. Successful applicants will:

• Have advanced analytical, research and communication skills, and the ability to conduct research and analysis on major energy, environmental and economic challenges in the western Canadian context.

• Have a passion for public policy and be able to work collaboratively to develop robust, evidence based, and thoughtful public policy recommendations for the benefit of Canada.

The internship starts on September 8, 2010 and ends on December 23 2010 (16 weeks).  The interns will work out of the Canada West Foundation’s Calgary office, will be paid $18/hour and will work 37.5 hours per week.

Please send the following items BY EMAIL to William Kimber with “FALL INTERNSHIP” in the subject line:

• cover letter outlining why you are interested in doing an internship at a public policy think tank, and how your capabilities fit the internship requirements above;
• resume, including awards and publications; and
• an unofficial transcript of your grades.

The program is designed to provide post-secondary students with a rewarding experience working at one of Canada’s leading public policy research institutes.

Posted by: Jason Azmier