Thursday, June 5, 2008

The Economy of Canada

The US is sliding into a bad place with respect to the economy. They are not yet in recession, but the way the macro economic situation looks, things do not look good. The parts of the Canadian economy that depend on the US are going to have a difficult few years coming up.

Meanwhile Quebec and Ontario see the writing on the wall and may actually be in a recession, but they are not all of Canada, no matter what the national media says.

BC, Alberta and Saskatchewan are all generally doing well and seem to be on the path to more success over the next few years. Yes, the forest sector is in trouble, but that is not surprising as it depends on the US but it is the only significant sector that seems to be in trouble.

The west still has a huge amount of natural resources that are in high demand in Asia. BC ports are going to be shipping more and more bulk commodities to Asia as there is no sign China will be slowing down anytime soon.

The west is also a huge global food source, with the rising global prices for food prairie grain will be a popular commodity and more lands will come into production.

Finally, BC and Alberta have an amazing new source of future global success, the youth coming out of our schools are the best in the world. There is no place in the English speaking world as well poised to own the new knowledge based world as BC and Alberta.

The next three years will also see a boom in construction in the west as the rate of population increase will speed up. BC and Alberta are likely to see a net inter-provincial migration of 200 000 to 300 000 per year for the next three years. Saskatchewan will see spill over as well and is likely to finally sustainably rise above one million people.

This shift of people in Canada will also bring BC and Alberta the brightest, best and hardest working people in Canada - and they will be younger. In the next ten years this means the west will also see a higher rate of births.

Meanwhile, if the economy of Canada is defined by the needs of Ontario, we will see lower interest rates in the whole nation and the west will even more gas poured on the heated housing market.

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