In an opinion piece in the Globe and Mail, Konrad Yakabuski said, writing about the rumours being floated by Team Trudeau, regarding today’s* Throne Speech, that “The suggestion that Canada can simply substitute what has been its main source of wealth-creation – oil – with an equally lucrative carbon-free one, is sheer fantasy. An energy transition may be under way. But it will take decades to complete. In the interim, the country must prepare for the long drought in oil prices that will make climbing out of this downturn much harder … [and he added, commenting on a timely warning, that] … point was driven home in stark fashion this week by former Bank of Canada governor David Dodge. In an essay for the Public Policy Forum, accompanied by an op-ed in The Globe and Mail, Mr. Dodge notes that Canada’s economy was already facing weaker long-term growth prospects before COVID-19 drove it to its knees.“
Nothing that either Justin Trudeau or Chrystia Freeland have said in the past weeks makes any economic sense at all. But, then, why should it? Neither Ms Freeland nor Mr Trudeau have any appreciable background in economics or business. Ms Freeland was a deputy editor of the prestigious Financial Times but her speciality was the rise of the post-communist era Russian plutocrats. Mr Trudeau was a part time drama teacher, best known, it seems, for wearing blackface.
“Indeed,” Konrad Yakabuski writes, “Canada’s net non-energy exports never recovered from the last recession. Where we long enjoyed a trade surplus in autos before the last recession, Canada was posting a $22-billion trade deficit in that sector by 2019. Despite its demonization, the oil and gas sector has remained the country’s biggest and most dependable source of exports. Net energy exports last year amounted to $77-billion. Oil accounted for 80 per cent of the total … [in other words the sector of Canada’s economy that Justin Trudeau has wanted to destroy since he entered politics is the goose that is laying the only (few) golden eggs that are left, and he says] … The prospect of anemic oil prices for years to come should be a cause for considerable consternation in Ottawa. Canada had been running a current account deficit for 11 straight years before the pandemic struck. The current account measures how much Canada sells to the rest of the world, minus what we buy from other countries, with net investment flows tacked on. No country can run a chronic current account deficit without eventually facing a run on its currency or, in the worst-case scenario, a debt crisis … [then he quotes the esteemed David Dodge who said] … “A permanently rising current account deficit is not sustainable … [and] … Inevitably, at some unforeseen moment, it will bite us in the back.”“
John Ibbitson, also writing in the Globe and Mail, says that “The Liberal government promises an ambitious Throne Speech on Wednesday. We’re expecting to see new spending to combat global warming and to cushion the economic pain of the pandemic. Much of it could be a terrible mistake … [because] … A report released Tuesday by the Fraser Institute, a conservative think tank, shows that a relentlessly aging population, coupled with the economic trauma of COVID-19, has Canada on track to reach debt levels worse even than the 1990s … [and some of us recall] … That crisis forced Ottawa and the provinces to bring budgets back into balance at the cost of overcrowded classrooms, deteriorating infrastructure and ever-longer wait times for health care … [and he says, very correctly, that] … No one should want to live through that again. But the [Fraser Institute] predicts we are well on our way.“
Justin Trudeau and Chrystia Freeland are leading (if that’s the right word) Canada towards the edge of fiscal cliff …
… the key question is: are we going to follow, blindly, or will we stop the Liberal fiscal madness and elect a fiscally responsible, socially compassionate and trustworthy government soon?
* It is “today” in Greenwich (London) when this blog changes its date. That’s (right now) 8:00 PM Easter Daylight Time in Ottawa. We soldiers are used to this, we often work in GMT (Greenwich Mean Time), which we call Zulu Time because the Greenwich Meriden is identified, in the world time zone system, as Z.