Canada's economic strategy -- beyond tourism

In his memoirs Jean Chrétien tells of his first meeting in Ottawa with an international leader, Yitzak Rabin of Israel. The conversation turned to economic strategy. Rabin told Chrétien he should think about tourism. Canada has great natural beauty and would be easy to promote abroad as a destination. Chrétien quotes Rabin saying how investing in technology and scientific research was costly, and capital intensive.

Tourism as the low cost alternative to investing in a science based future appealed to the Liberal prime minister, but it hardly replaces serious thinking about economic strategy. In his book Beyond the Bubble prolific York University author and political scientist James Laxer calls on progressive Canadians to look closely at where Canada stands in the emerging world economy. As China looms larger, and the U.S. share of world economic activity continues to decline, from 50 per cent after the war to less than 20 per cent today, he is astonished that the major changes happening all around us are not being addressed by our political leaders. Most importantly he wants us to debate seriously what our economic strategy should be going ahead.

Statistics Canada reported last week that job creation is up. Business commentators exclaimed that Canada was well positioned compared to other industrial countries to enjoy an early recovery, thanks to our fiscal position and our strong dollar. Steelworker economist Erin Weir read the Stats Can report and noted that private sector job creation was down, and that only public service jobs had increased. In the meantime public service jobs are under attack in every jurisdiction in Canada.

In Quebec, public servants from different unions, teachers, nurses and government employees have established a common front to insist upon open collective bargaining. Across Canada legislated cuts to jobs and salaries are expected and being urged by newspapers editorialists and big business groups. This can only make the jobs outlook worse.

The strong Canadian dollar and efforts to strengthen the fiscal positions of governments are both deflationary, shrinking the amount of money available to spend in Canada, and hampering any recovery. Indeed intelligent business commentary such as available by David Rosenberg focuses on the dangers of a double dip recession. The recovery may be too weak to withstand government cutbacks gleefully being promoted by the Harper government to please core conservatives, and advance their no government is good government philosophy.

Expect job market jitters to continue, and full-time unemployment to get worse as government austerity programmes get applied in deference to Conservative ideology.

The large increase in welfare recipients is what should be getting the attention. Increases of 14 per cent in B.C. and 11 per cent in Ontario show talk about how things are getting better is beside the point.

We need a wide debate around what to expect from our economic life. Can we redefine our goals to be economic and social well-being? How do we reduce poverty and inequalities? What constitutes a sustainable economic future?

We need to go beyond tourism as an economic strategy.

Duncan Cameron writes from Vancouver.

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