With the swearing in of a new government this coming week, here are a few more thoughts about issues Prime Minister-designate Justin Trudeau and his party will have to clean up after the Conservatives leave office.
The largest is the economic mess we are in.
The Canadian economy has undergone major shifts during the past two decades which were accelerated by outgoing Prime Minister Stephen Harper. We have shifted to a resource extraction base in our primary industries to a large degree. We ship raw materials overseas for secondary processing. We have lost or are losing significant portions of our manufacturing base.
This might not seem like a bad thing, but it leaves our economy vulnerable to the demands of other countries. It leaves us in a position of not being able to set the price for our commodities. We must accept what the market will bear.
From an economics point of view, this isn't inherently bad. Indeed, it is the basis of a free-market system - a system based on supply and demand. If the world's economy was a free market we would likely fare very well.
However, the world is not a free market. Wages in countries vary significantly. Environmental protection is non-existent in some countries. Not all governments in the world are democracies. Protectionism is rampant.
The consequence is that we are susceptible to a world oil price, for example, which we don't set or seem to have any influence over. In part, this is because we gave away control of our export oil market many years ago and I will get back to that.
Our dependence of natural resource extraction is complicated by such things as the Softwood Lumber Agreement. How do we establish the simple notion that we do things differently in Canada without the accusations of a government subsidy from United States logging interests? How do we get fair treatment on a global stage?
Softwood lumber is only one of many products where we run into U.S. protectionism. It is the problem with having a bully as a best friend.
We are a wealthy nation with a high GDP per capita and significant economic standing in the world. But we are also a nation which is increasingly becoming a seller of raw materials and an importer of manufactured goods.
Indeed, a year or so ago, I asked the president of a local forest company why his company didn't buy local equipment. His response was basically "why develop a local industry when we can just buy equipment from Europe and adapt it to our needs."
It is this sort of approach which will increasingly see Canada's economy slide.
This brings me to the second mess that needs cleaning up and that is the Trans-Pacific Partnership. It might be a good deal or it might not. No one really knows because the full text has yet to be released.
However, it is fairly clear from the details which are known that some economic sectors are going to suffer significantly - witness what NAFTA did to our oil industry. The Conservatives even planned for which industries we will see decline.
Harper was absolutely convinced the TPP would be a net benefit to Canadian business - it would open up access to a market of 800 million people we were told. True but it also opens up Canada to all of the other countries participating. Those 800 million people want to sell their goods here and they can do so cheaper than Canadian companies.
It reminds me of a conversation I had with a local business leader. He was talking about how no one in this town buys local. How his fellow business people were not availing themselves of his goods and services. That might have been true but his solution was to buy his trucks in Alberta - and not support local businesses.
It is called a feedback loop. The more local business doesn't support local business, the more those local businesses can't afford to support local business. The only difference is Free Trade Agreements move everything to an international level.
Business will say "we can't afford Canadian wages so we will move our manufacturing to countries where the wages are less" but then they will wonder why Canadian workers can't afford to buy their goods.
Is the TPP a good deal? Who knows? We will find out when the details are released and various economists have had a chance to dissect the cumulative impact. But it is part of a bigger issue we face: how do we maintain a vibrant and diverse economy in the face of an increasingly flat world?
We seem to have been in a reactionary mode - responding to other actors on the world stage - for the past 10 years.
Maybe it is time for Canada to step up and taking on a leading role.
