Canada now seeing the human face of economic uncertainty
It’s been a rough couple of weeks. Canadians are anxious about the economic situation. Everyone knows someone who works in either the oilsands or the auto sector. A family member. Friend. Neighbour.
Or at least everyone who lives in Alberta and Ontario, the two provinces that are supposed to be the economic engines of our country.
Last week, Albertans took to the streets to protest Prime Minister Justin Trudeau’s visit to Calgary. They’re facing a crisis, he says. Then he hops back on his plane. No mention of what he’s going to do. Some leadership.
And let’s be clear about one thing: they don’t want handouts. Alberta politicians, businessmen and regular folks stress that repeatedly. They just want some of the four stalled or aborted pipelines to get built. A reasonable request.
“We have the right to be angry,” Calgary Sun columnist Rick Bell writes. “Still no pipeline in the ground while we still pay a carbon tax. Selling our oil at bargain prices. High unemployment. One in four downtown offices empty. Investment drying up.”
One complaint from Albertans was that if another province, such as Ontario was facing a crisis with, say, the auto sector, there would be immediate action from the feds. We’re about to find out whether that’s true or not. Either way, it’s not pretty.
On Monday, General Motors announced its plans to permanently close all of their operations in Oshawa — the eastern GTA city that’s long been one of Canada’s top auto manufacturers. That’s 2,500 direct jobs at the plant, to disappear at some point next year, along with thousands more indirect jobs.
Taxpayers gave them $10 billion back in 2009 to keep afloat and yet they unceremoniously close up shop, with a news release that doesn’t even acknowledge the people they’ll be putting out of work.
One economic analysis I was sent, prepared by a firm for Unifor, analyzing the possibility of the plant’s closure pegged the economic costs of this move as sizable. There would be a $5 billion loss to the economy. Provincial revenues would decline by $400 million per year. Federal revenues by about $500 million annually. And the Canada Pension Plan would lose around $120 million in annual contributions.
These stats are a reminder — like with the oilsands — that these isolated pieces of bad news aren’t isolated at all. We’re all affected. We share the pain.
A few weeks ago the Conference Board of Canada released its comprehensive fall forecast and while it wasn’t doom and gloom, almost every subheading underscored how Canada is trending negative.
A random sampling: “Slower Economy Results in Slower Pace of Hiring and Weaker Wage Gains”; “Households Will Be Challenged by Rising Costs”; “Government Budgets Remain Under Pressure.”
Sure, there are a few OK spots here and there but the overall direction is not positive. The public is feeling it. The burden is adding up.
For months now, we’ve had business execs and reps from industry warning us that things are taking their toll. These botched energy projects are a mess. The regulations are dragging us down. The carbon tax is an albatross. The U.S. is looking like a far better place to do business.
These lamentations perhaps first looked like something for the business pages, like it was all Bay St. spreadsheets. Talking heads in suits discussing internal affairs. But no, they’ve been talking about real life.
We’re now seeing there’s a human face to all of that economic data, all of those warnings. It’s the people taking to the streets in Alberta. The soonto-be unemployed in Oshawa. And the people behind all of those smaller job losses that didn’t make the news. And the jobs that would have been created but weren’t.
Economic uncertainty. It’s what we’ll all be talking about at the dinner table this Christmas.
Mounted police officers monitor a protest outside an event Prime Minister Justin Trudeau is attending in Calgary, Alta., Nov. 22, 2018.
Workers of Oshawa's General Motors car assembly plant, listen to Jerry Dias, president of UNIFOR, the union representing the workers, at the union headquarters, in Oshawa, Ont. on Nov. 26, 2018.