The Commerce Times

Wake up, Canada: It’s time to start thinking about the future

Illustration courtesy of George Stepanov

November 10, 2009 1 | By Denise Law

When China recently surpassed Canada as the United State’s largest exporter, Canadians didn’t seem to care.

This indifferent mentality must change.

There is no doubt that our country has prospered from its abundant supply of natural resources. But persistent complacency in the face of a shrinking manufacturing sector will inevitably serve to cripple Canada’s economy.

The country was never immune to the economic crisis. With almost 80 per cent of exports flowing south of the border, the meltdown in the U.S. housing market, coupled with a high Canadian currency, meant manufacturers were lucky if they survived.

Indeed, the global recession was, as Dr. Sherry Cooper, chief economist at BMO Capital Market, puts it, “unprecedented, synchronized and precipitous.” But it also exposed so many faults in the Canadian economy, some of which have been addressed but demand immediate action.

First and foremost, the recession in the United States – and later in Canada – merely revealed that Canadians were too dependent on North American trade. Both countries now realize that they must diversify their international trade basket.

Secondly, the Canadian manufacturing sector was already struggling to cope with a soaring Canadian dollar and competition from abroad. The recession simply shed light on a problem that’s been going on for far too long. Only now have politicians begun expressing concern over a high loonie.

And finally, the global recession has highlighted the need for more investment in education, research and development as well as a strong, flexible workforce.

Yes, the country boasts one of the strongest financial systems in the world, but on a broader scale, Canada lags behind many developed countries – including those in Europe and Asia – in innovation, the lifeblood of economic progress.

By depending too much on the same industries – financial services, natural resources and the public sector – rather than investing in value-added industries, Canada will never reap the benefits of a highly-competitive economy.

When it comes to Canadian contributions to the world economy, Research In Motion (RIM) is all we have.

With an unemployment rate at 8.6 per cent and job creation seen mostly in the public sector, Canada’s economic future remains wary. This isn’t to suggest that the economy will suffer or end up in a black hole. But by staying complacent, the economy (including Canada’s workforce) will never reach its full potential.

I won’t be surprised when students start heading abroad for work.

Stimulus packages may provide a shot in the arm, but serve little purpose in the long-run.

As economic power shifts to Asia, Scandinavian and Western European countries have invested in the high-education sectors – pharmaceuticals, healthcare, software, consulting and biotechnology – in order to stay competitive.

Canada needs to start looking beyond its borders and learn from the best. Only then should we really pat ourselves on the back.