You just need to look at the big gainers on the TSX to come to the realization that Canada really has become the tale of two economies. The TSX has gained on 17 of the last twenty session driven by oil prices that can't seem to find a ceiling and commodities prices. Potash has also been a factor, due to escalating demand from China.
The bad news, the really bad news, is that Canada continues to lose high quality manufacturing jobs at an alarming rate. According to a report published yesterday by TD Bank, Canada lost 130,000 manufacturing jobs -- most of which were in Ontario and Quebec. Most of these jobs were high-quality, high-productivity jobs in manufacturing according to Beata Caranci, the bank's director of forecasting.
Flaherty and Harper have been claiming that overall job growth is strong, and that the jobs being lost in manufacturing are being replaced in other areas of the economy. That is simply not the case. Most of the job growth has been in construction, healthcare and the hourly wage market. The construction market has been fuelled by the rapidly cooling housing boom and infrastructure development to support the commodities boom. And while healthcare jobs might pay well they don't produce anything of real value. As for McJobs, well the TD report says on average the displaced workers wind up making about 25 per cent, or about $10,000 a year, less than what they were earning before.
Meanwhile Harper is busy rolling out his "law and order" program, and Flaherty is busy defending his pork-barrelling and claiming that simply by cutting corporate taxes (specifically business investment taxes) manufacturers would come back like lemmings following the Pied Piper. This one note tax mantra is a riduculous proposition. Meanwhile our increasing dependence on commodities to drive the economy is a recipe for disaster. When the resources are depleted we will be left with nothing, not to mention the environmental damage we will cause by continuing down this path.
We need real leadership to develop policies and programs that will drive new investment and assure the long term viability of our economy. We need to begin to invest heavily in education and R&D to drive innovation and the emergence of new industries. We also need to invest heavily in infrastructure (including high speed train networks) and rationalize our PUBLIC healthcare system to ensure its continuing viability. Then we must sell the benefits of the PUBLIC systems we have put into place that will be a significant benefit to private corporations. Given that healthcare expenses have been a significant factor in undermining profitability of companies like GM and Ford, this is a significant competitive advantage, yet I don't see our politicians out there selling the benefits. Flaherty in particular seems to be limited to a one word vocabulary -- it's all about taxes.
We also need to begin exploring the benefits of developing strong regional economies that will help protect high value jobs and help us to meet our environmental goals. We should be quickly moving towards making it easier for goods and services to move between regions in Canada, much as BC and Alberta have done. We should also be looking to create stronger regional ties and trade agreements with proximate regions south of the border -- a Great Lakes Trade Region or a Cascadia Trade Region for example. We should also be evaluating trade with countries that have no labour or wage standards in place.
What we can't do is continue down the path we are currently on. What remains to be seen is which political party will rise to the challenge.