The Next Conservative Leader

[Edward Campbell]

It is hard, very hard, to "support" (subsidize) manufacturing under existing trade law ... unless there is a national defence security aspect to it (like the LAV).

The kind of high volume, relatively "easy" manufacturing that many people would like to do is also low skill/low wage and, therefore, well suited to Indonesia or the Philippines, not to high cost Canada.

 

[Lumber]

It is hard, very hard, to "support" (subsidize) manufacturing under existing trade law ... unless there is a national defence security aspect to it (like the LAV).

The kind of high volume, relatively "easy" manufacturing that many people would like to do is also low skill/low wage and, therefore, well suited to Indonesia or the Philippines, not to high cost Canada.

Do tax and regulatory incentives count as "subsidizing"? If we offered tax incentives to foreign investores to establish manufacturing/harvesting operations in Canada, would that be considered subsidizing?

 

[PuckChaser]

Do tax and regulatory incentives count as "subsidizing"? If we offered tax incentives to foreign investores to establish manufacturing/harvesting operations in Canada, would that be considered subsidizing?

No, that's why the Tories pushed for lower corporate tax rates, to encourage companies to set their headquarters up here. Unfortunately, the hydro costs and provincial taxes in Ontario and Quebec stop manufacturing companies from wanting to set up here. Overhead is way too high.

 

[YZT580]

No, that's why the Tories pushed for lower corporate tax rates, to encourage companies to set their headquarters up here. Unfortunately, the hydro costs and provincial taxes in Ontario and Quebec stop manufacturing companies from wanting to set up here. Overhead is way too high.

It also got them planning to move out.  I noticed that GM made no commitment re: Oshawa in Davos.

 

[Lumber]

No, that's why the Tories pushed for lower corporate tax rates, to encourage companies to set their headquarters up here. Unfortunately, the hydro costs and provincial taxes in Ontario and Quebec stop manufacturing companies from wanting to set up here. Overhead is way too high.

Couldn't this be another form of incentive? "Set up your plant here and get a %50 rebate on your energy bill for the next 20 years".

"No property taxes for 20 years!"

"You don't pay the interest on loans until 2033!"

 

[Fishbone Jones]

Couldn't this be another form of incentive? "Set up your plant here and get a %50 rebate on your energy bill for the next 20 years".

"No property taxes for 20 years!"

"You don't pay the interest on loans until 2033!"

That's done all the time. Problem is, other jurisdictions offer a better deal.

 

[Kirkhill]

Also that takes manpower to negotiate each and every one of those deals - and time.

Versus an across the board low cost regime from low energy costs and low taxes.

The latter is more cost effective and lest wasteful of bureaucratic resources.

 

[Brad Sallows]

>What we CAN control is our economy being reliant on the energy sector and spin off industries. And guess who doubled down on oil in the last decade?

Please sh!tcan that "all oil, all the time" nonsense.

Gross domestic product at basic prices, by industry (monthly) (a snapshot comparing 2014 and 2015 at statcan.gc.ca).

The collapse in oil and other commodity prices is a problem, but it isn't THE problem.  What it has done is reveal how weak everything else is and how little anyone else has managed to do.

I continue to believe we are not going to see higher levels of GDP (spending growth) because previous higher levels of growth were attained on the backs of consumer borrowing, and consumers have less room to borrow.  Federal governments may be able to indefinitely spend 110% of their annual incomes each year, but people can not.

 

[a_majoor]

>What we CAN control is our economy being reliant on the energy sector and spin off industries. And guess who doubled down on oil in the last decade?

Please sh!tcan that "all oil, all the time" nonsense.

Gross domestic product at basic prices, by industry (monthly) (a snapshot comparing 2014 and 2015 at statcan.gc.ca).

The collapse in oil and other commodity prices is a problem, but it isn't THE problem.  What it has done is reveal how weak everything else is and how little anyone else has managed to do.

I continue to believe we are not going to see higher levels of GDP (spending growth) because previous higher levels of growth were attained on the backs of consumer borrowing, and consumers have less room to borrow.  Federal governments may be able to indefinitely spend 110% of their annual incomes each year, but people can not.

Indeed. While the Young Dauphin was spinning the "collapsing oil pillar" nonsense, the reality was that sector was only 8% of the economy at the time, while leasing and real estate was 13%, and more ominously, government expenditures were also aprox 13% of the economy. Using their own political logic, real estate developers are to blame for the state of the economy....

 

[Remius]

is not though, that oil is more heavily linked to our dollar and has a bigger effect on our dollar thus having a bigger effect on our economy even if it is only 8% of it?

 

[Kilo_302]

Indeed. While the Young Dauphin was spinning the "collapsing oil pillar" nonsense, the reality was that sector was only 8% of the economy at the time, while leasing and real estate was 13%, and more ominously, government expenditures were also aprox 13% of the economy. Using their own political logic, real estate developers are to blame for the state of the economy....

As someone working with clients out West, I can tell you that the oil sector affects other sectors. This is pretty straightforward. For example Saskatchewan's provincial budget was cut significantly in 2015 because of oil prices. This affected all government services, and as a consequence many industries that sell to government. We had several school divisions and government offices put off fleet refresh RFPs indefinitely. So while the "oil sector" might only be 8% of the Canadian economy (this link seems to suggest that oil gas and mining are actually 27% of our GDP, so not sure how you're defining "economy  http://www.cepa.com/about-pipelines/economic-benefits-of-pipelines/the-energy-sectors-contribution), the affect is far greater.

The fact that Canadian economists are painting a dismal picture for our economy in 2016 and have specifically mentioned oil prices as the main factor says to me that oil is indeed the problem, and we're over-exposed.

 

[Good2Golf]

The fact that Canadian economists are painting a dismal picture for our economy in 2016 and have specifically mentioned oil prices as the main factor says to me that oil is indeed the problem, and we're over-exposed.

So what is our "resourcefulness" going to replace the reduced oil production with, in order to keep GDP at nominal levels?

 

[Kirkhill]

Well, we used to generate more money from selling oil than selling cars.  Apparently the world is back in balance again because we are now making more money from cars than oil.  Unfortunately this is not because we are selling more cars.

 

[jollyjacktar]

Well, we used to generate more money from selling oil than selling cars.  Apparently the world is back in balance again because we are now making more money from cars than oil.  Unfortunately this is not because we are selling more cars.

Chris..... those are not cars..... just say'n.

 

[Kirkhill]

This concept references an interesting phenomenon that occurs in buckets of crabs. If one crab attempts to escape from a bucket of live crabs, the others will pull it back down rather than allowing it to get free. Sometimes, the crabs seem almost malicious, waiting until the crab has almost escaped before yanking it back into the pot. All of the crabs are undoubtedly aware of the fact that their fate is probably not going to be very pleasurable, so people are led to wonder why they pull each other back into the bucket instead of helping the clever escape artist.

 

[jollyjacktar]

I remember reading that somewhere before, now that you mention it.

 

[Fishbone Jones]

This concept references an interesting phenomenon that occurs in buckets of crabs. If one crab attempts to escape from a bucket of live crabs, the others will pull it back down rather than allowing it to get free. Sometimes, the crabs seem almost malicious, waiting until the crab has almost escaped before yanking it back into the pot. All of the crabs are undoubtedly aware of the fact that their fate is probably not going to be very pleasurable, so people are led to wonder why they pull each other back into the bucket instead of helping the clever escape artist.

Sounds like a couple of Units I served with. :

 

[Good2Golf]

This concept references an interesting phenomenon that occurs in buckets of crabs. If one crab attempts to escape from a bucket of live crabs, the others will pull it back down rather than allowing it to get free. Sometimes, the crabs seem almost malicious, waiting until the crab has almost escaped before yanking it back into the pot. All of the crabs are undoubtedly aware of the fact that their fate is probably not going to be very pleasurable, so people are led to wonder why they pull each other back into the bucket instead of helping the clever escape artist.

Ah, the 'Blue Falcon' crab!

 

[ballz]

So what is our "resourcefulness" going to replace the reduced oil production with, in order to keep GDP at nominal levels?

Oh that's an easy trick, just de-value the currency by going into debt via stimulus spending. Never fails to make the GDP grow. The Federal Reserve taught the world that trick and every government has been using it since.

But why does GDP growth really matter? If we doubled our money supply, our GDP would double as well. So would that mean our economy has strengthened?

 

[dave.jones3]

To be fair, that's why most measures of GDP are done in real dollars...