Our Economy
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The global economy is going into a recession/depression and Canada is following along.

“Inputs” – energy (oil, gas, coal, nuclear energy, wind and solar farms) has reduced production and will remain so for years.  Globally, green energy is intermittent; nuclear power has been shut down because it can not compete with the subsidized green energies, nor can it be readily brought online for short bursts of needed power; oil, gas, coal and other minerals are priced too low to extract profitably.  The easily accessible products (oil, coal, nickel, copper, etc) have been taken.  Now more money has to be spent for resource infrastructure, employment, exploration, R&D.

And with shareholders pressuring the boards of these resource companies for dividends and share increases (share buybacks), there is little money and incentive to increase business.

By coincidence, most resource based products have had a recent surge in prices (Feb/Mar 2022) which may make the businesses profitable.  The resource companies feel this may be a blip.  Oil, for instance, has gone from about $60/barrel in late Aug 2021 to $123/barrel (which would make production profitable) and down to (beginning Apr 2022) $90/barrel and still going down.

Other resources are the same; low prices for a long time then recent surges

Interestingly, with oil prices rising, production has also increased.  Although Canada exports goods (resources) and services (engineering, technical, research, etc), oil and coal have a large impact on the Canadian economy.

Below stats from Trading Economics

The distortions in average wages that occurred in April and May 2020 reflect the effects of the lockdowns, when many lower-wage employers, such as restaurants and retailers, were shut down, and their employees were laid off. Their relatively lower wages fell out of the averages, while many people in higher-paying service jobs, such as those in financial services, tech, and other sectors, switched to working from home.

As millions of lower-wage people were laid off, the higher wage earners became a bigger proportion of the earners and pushed up the year-over-year gains in average hourly wages. In April and May 2021, the low year-over-year gains reflect the high base a year earlier

The pictures show most commodities/resources relatively flat and low prices.  This was (sorta) fine when wages were lower, manufacturing/harvesting were lower. Now expenses are too high to be profitable.  And higher prices of steel, nickel, copper means less production.  Vehicles, industrial and consumer goods cost more, resulting in fewer sales.  And with low wages, more people will make the decision to pay more for rents and food, and less on cars and equipment that can be purchased later in the future.

And lower production means loss of jobs, which means less purchases of goods (phones, equipment, clothes, cars, houses).

A recession will not seriously affect the higher incomes; they tend to spend their money on services – tax lawyers, private schools for their children rather than goods such as mentioned above.

When CoVid surged throughout the world, economies came to a halt. With the exception of China, all other economies contracted.  The problem is, after a shutdown, businesses and economies can’t just quickly restart. Skilled workers that have been fired or laid off have been hired elsewhere (or retired).  New workers have to be retrained. Equipment and inventories have to be purchased. And these equipments and inventories have to be made but we are back to the original problems of shutdowns.  And so there is a time lag, placing many companies into the precarious position of closing down.

Which lays off people and vacates buildings and decreases the need for the equipment and inventories.

Canada GDP201820192020
Other Countries

Service based countries (tourism) took a substantial blow of around 30% retraction.

But Canada has had slow growth and the occasional contraction for some time.

Canada is a major exporter of cereal crops – canola, wheat, barley, etc.  Prolonged droughts in central North America has reduced Canadian crops for export about 35%.  Many sovereign cereal crop exporters are no longer exporting; they are keeping in-country for domestic use.

To Review

Metals commodities have been in a slump for more than a decade. Those who play the stock market have seen this on your portfolio.  Grains have risen and dropped slightly over the last decade.  Farmers complain…..     The resource industries have slowed down / stopped production / gone out of business because of the long term pricing in their respective fields.  This leads to layoffs. No or reduced (sometimes drastically) raw materials for manufacturing means less items being made.  This also leads to layoffs.  These are usually good paying jobs.  So manufacturing is down, leading to fewer exports and less local demand (can’t get products or are sometimes priced too high).

Late 2021, prices for commodities have risen sharply.  But the resource industries are not ramping up, although it is now generally profitable to do so.  Companies are reluctant to spend money to scale business when historically, this demand is for a short period of time, then a slump ensues. Shareholders demand (finally possible) a return on their investment. Increasing production means opening new mines (or equivalent, depending on industry) which take time, money and skilled labour.  Skilled labour is harder to find as former employees that have been laid off find work elsewhere or retire.

And because of this, materials are not available to make or complete whatever is being manufactured. This along with other costs (transportation (fuel, insurance, repairs), increased lease charges, land taxes dramatically increasing, insurance (going up dramatically)), doing business is unaffordable.  And businesses close (workers laid off. Again.) or are absorbed by larger businesses.  And larger businesses use their market power to increase prices.

And so service industries expand.  Salons, massages, dance lessons, bars, restaurants, tourism, transportation services (Uber, food delivery), shop salespersons and more.  And service industries are generally lower paying jobs, so slowly the economic slowdown in Canada persists.

The top three international shipping companies (controlling 80% of the industry) made $19 Billion profit in 2021 – more than was made for the previous ten years combined.  Meatpacking companies pay ranchers low prices for their stock (cows, pigs, chickens, etc) and charge high prices to retailers, who in turn add extra profits on the items sold.  And inflation goes up and up.

Farmers are having a hard time planting.  Throughout central North America, there is a prolonged drought. Crops need water. There is a scarcity of fertilizers – often made from natural gas, which has been cut back. Labour is hard to get, as farm workers were often brought in from outside the country, and the pandemic slowed / stopped this practice.  Local labour is still wary of infection rates and hesitate to work alongside someone who may not be following vax protocols.  And with the stimulus monies (now gone), there is now an expectation amoung workers (in all industries) for better wages and working conditions.

This all leads to a slowdown (recession) for Canada and globally. Which means less money for people and Canadian infrastructure.

How To Make Canada Better

And so A New Canada feels Canada needs to become more domestic based, with an aggressive export program.   Varied export markets would lessen our dependence on the USA which has, at times, hindered us because of their politicking. Oil pipelines immediately come to mind. Varied international exports would help our GDP and growing our internal economy would protect us against many of the external influences that could reduce our economy. Experts may call this as being more isolationist. We call it regaining a strong national economic foundation. And we want to protect the people of Canada.

Generally, our proposals are to create and use products and resources within Canada first.  Although we have a diverse economy, the resource sector has a big influence on Canada’s economy.  Some export countries are starting to build their internal economy so they are not so reliant on external influences. China is a big example….

Canada, as a resource export country, will see its standard of living fall. Prices for gas, food, in some cases, energy (depending on the province) will rise.  Wages will rise very little.  Housing (rents, home purchase prices) will rise. Although there is a surplus of jobs currently, the majority seem to be in services (which are low paying) and will shrink because of little extra money in the family budget. Food insecurity, always present, is rising as prices get ahead of incomes.

Here is what we propose…

  • A New Canada advocates increasing resource pipelines in Canada going coast to coast so we do not have foreign influence whether our resources can be exported.  This will allow the east coast to use Canadian fuel rather than import what we already produce.  This will allow exports on both coast. A fuller explanation is here
  • A New Canada advocates having value added to the manufacturing of resource products as we export products.  This will create well paying jobs and increase value to Canada’s resources. 
  • A New Canada advocates having a favourable economic/tax incentives for research and businesses in such fields as pharmaceuticals and bio research and other “high tech” industries.  We want to increase manufacturing – perhaps using “pick & shovel” philosophy (produce the basics everyone needs locally and globally – China does this well.) We also want to expand our computer research (we are a world leader in Quantum Computing) for defense and manufacturing. 
  • A New Canada has a solution for reducing crime, drug use, domestic violence, reducing mental and emotional health issues, suicides, public violence (ie: from frustration, sense of worthlessness, no hope). A New Canada would initiate Universal Benefits Income (UBI) for all Canadians. This will give extra money with no strings attached.  People will have more confidence for moving from a poor job (low wage, 24/7 on call, intimidation and threats from bosses), poor housing (rats, mold, leaks, poor insulation, etc).  For more details, go to our section on UBI.
  • A New Canada advocates creating a flat tax (one tax rate for everyone) which would help many people with a reduced income tax.
  • A New Canada advocates reducing/eliminating organized crime and its money laundering proceeds.  Money Laundering and other criminal activities is a $2 Billion a year business in Canada. This is a big issue with A New Canada. This will reduce drug dependency, make housing affordable, eliminate foreign countries influencing our economy and politics. You can find out more here.
  • A New Canada advocates addressing homelessness.  Many are working but living in their vehicles or couch surfing because of the high rents throughout the country.  We want to increase subsidized housing by creating “villages” near major transportation lines. The housing would be a combination of subsidized housing; 30% for 1/3 income to rent costs, 30% to reduced rents and 40% to full market rents.  This combination will eliminate ghettos and give a good neighbourhood mix. Also look at how UBI would help.
  • A New Canada advocates Universal Free Prescription.  Many children and elders suffer from not being able to afford life altering drugs.  Along this line we also strongly advocate free Vitamin D (10,000 IU). If you have gone through our CoVid mandate, you will know how life altering this steroid (not a vitamin) is.
  • A New Canada advocates a stronger internal economy.  In part, we feel having oil and gas pipelines in Canada coast to coast rather than crossing international borders will strengthen our major industries. Despite talks of the green economy, if there was an instant remedy for alternative power (there is; see our alternative energy mandate), oil and gas would still be with us for at least a quarter century.
  • A New Canada advocates Healthcare changes.  We have a national shortage of licensed nurses, doctors and specialists.  This means hiring outside the country and allowing them to immediately work in their respective fields. Our strong protective licensing organizations keep a closed shop, making it almost imposable for foreigners to work in their fields. A New Canada wants a process whereby skilled and professional immigrants can quickly work in their respective fields.  We also want to place more students for medical training – free university?
  • A New Canada advocates reducing transplant wait times.  Lives are lost and quality of life is severely degraded because of transplants waits.  Originally, we wanted specialty hospitals whereby transplant recipients are in an almost assembly line environment, where junior doctors do the initial procedures and a specialist arrives, does the transplant and on to another operation while the junior doctors close up the wound.  This is done in such countries as India with great efficiency.  Closer examination shows that Canada has enough open operating room hours; the problem is not enough specialists (ie: nurses trained in support, knee replacement specialist (or other body parts), anesthesiologists).  Now we are back to more specialist training, immigration.

All this will be revenue neutral so the programs will cost little or nothing.

For a fuller explanation, join us here.

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