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From a speech by Jim Prentice, senior executive vice-president and vice-chairman of CIBC, to the Toronto Board of Trade Thursday.
No room for ‘ideological purity’ on government
My objective is to knit together my views on the structural changes taking place within the Canadian economy, with a particular focus on the impact of planned energy megaprojects, the dawn of the Asian century and the accelerating erosion of Canada’s industrial and manufacturing base in Ontario.
Given these forces and their complex implications, how best can we spur economic development and create prosperity for today, tomorrow and for generations of Canadians to come?
The days of nation-building are not at an end. In response to domestic and external demand, you will find no other G8 country — in fact no other country in the world — that is bringing on infrastructure projects at the pace and relative scale of Canada. The investment is significant. Close to $290-billion of investments over the next 20 years. And the list of projects on the drawing board is astounding.
Taken together, these planned infrastructure projects will fuel the next stage of Canada’s economic development and job creation. They represent a national opportunity to develop our resources, create jobs, strengthen our manufacturing sector and build on the strengths of our financial community. This is a story that has resonated across the country. In Atlantic Canada. In Alberta and in B.C. But perhaps less so in Ontario. You may ask why.
Earlier this week, CIBC released a report showing the effect of the rising Canadian dollar on the manufacturing base of this province. The numbers are striking. A decade ago, manufacturing contributed to over 20% of the province’s GDP. Today, it’s only 15%. In 2001, Canada enjoyed a trade surplus in the automotive sector of $20-billion. Last year, we had a trade deficit of $12-billion. Our dollar’s strength has undermined Ontario’s efforts to sustain manufacturing exports and stay competitive with the U.S. market.
One of the key realities of the 21st century for Canada and for Ontario is that the commodities we have in abundance as a nation are — and will continue to be — in high demand among the emerging countries of Asia. Our dollar is not going to be in measurable decline any time soon. Those old manufacturing jobs aren’t coming back.
So the question is: What do we do? How do we revive Ontario’s prospects and set it on course toward a more promising future? This debate is just starting, but I know three things for sure.
We need to build on our strengths. Canada must have a strong industrial heartland and excel at manufacturing, and governments have a real role to play in making this happen.
Let me expand on these.
For the rest of this column, please go to the National Post website: http://opinion.financialpost.com/2012/03/01/jim-prentice-we-cant-be-economic-boy-scouts/