Assets in the Dirt: Even if bank economists like Drummond can’t add them up, Ontario has lots we can bank on

The people of Ontario have taken two weeks of being kicked in the assets following the release of bank economist Don Drummond’s report on government overspending.

The document is one-third wake-up call (we’re spending a lot of money very inefficiently), one-third call to arms for some bold eco-economic thinking and one-third shock therapy designed to scramble the brain with despair caused by an absolute lack of alternatives.

Welcome to Ontario’s version of the revolution of falling expectations. If you buy his assumption that there is no more money coming from growth based on new industries or sales opportunities, you have no choice but to buy the math. Rejoice –  you have no choice. That’s why the opening chapter features “strong fiscal action” rather than strong political leadership.

The pillars of Ontario’s industrial economy of the past century have crumbled, Drummond tells us. The World Trade Organization killed managed trade deals like the Auto Pact. The rest of the manufacturing sector went south looking for cheap labour. And the rising Canadian dollar killed off the remainder – once-competitive export sales that thrived when the dollar was cheaper.

It’s all vintage Drummond, all clearly laid out in his 2008 report Time For A Vision Of Ontario’s Economy. Except, that is, for his 2008 call for a carbon tax, which disappeared once Premier McGuinty issued his fatwa against tax increases. It was all over but the arithmetic.

That’s in keeping with McGuinty’s record, says Mark Winfield, enviro studies prof at York and author of Blue-Green Province: The Environment And The Political Economy Of Ontario. When it comes to this province’s treatment of pollution-intensive energies, it’s been pure “Don’t – don’t stop.”

The Green Energy Act, he says, was undermined by massive giveaways to the nuclear industry, for example. And there’s been no move to follow BC, another oil-poor province, which adopted the continent’s first carbon tax. “There’s a whole energy efficiency and renewable bundle we could move on,” says Winfield.

Which leads me back to the kick in the assets. I favour adapting a line from former U.S. president Bill Clinton’s 1993 inaugural address: There is nothing wrong with Ontario that cannot be cured by what is right with Ontario.

As a newcomer to Buddhist gratitude, I was struck by how short Drummond’s list of Ontario assets is: basically “an internationally competitive tax regime” and a highly educated workforce.

Pardon me for not feeling buoyed by the possibilities.

No mention of extraordinary social cohesion and public safety, which set Ontario apart from competitors south of the border, especially when it comes to attracting the “creatives” of the knowledge economies.

No mention of multiculturalism or biculturalism, a huge linguistic and cultural competitive advantage when seeking sales in global markets. No mention of the most fertile soil in Canada, the biggest set Jerry Rice Womens Jersey of great lakes anywhere, and one of the best climates for food production in the world, especially a world facing drought and withering heat.

No mention of diverse ecosystems providing most of the essential energy and material needs, from nickel to pulp, of a modern economy. No mention of Toronto’s “urban advantage,” acclaimed in most reports on global competitiveness. No mention of the world-leading talents in the community, charity, co-op and non-profit sector. These are all things a society can bank on, Jerry Rice Youth Jersey even if number-crunching bank economists are trained to see little of it, since this kind of wealth Jerry Rice Kids Jersey can’t be stored and hoarded, and therefore doesn’t exist. And Don’s your uncle.

A diverse economy faced with export problems always has the option of “import substitution” as a way to at least begin charting a new course. Consider farming, for example. According to the February issue of the Journal of Agriculture, Food Systems and Community Development, Canada has been importing 1.6 million tonnes a year of vegetables since 2001. The top 10 on the import list – lettuce, tomatoes, melons, peppers, carrots, onions, broccoli, celery, cauliflower and cukes – all grow well in Ontario, many of them year-round.

I am not talking about growing pineapples or oranges. I am talking about buying the food we already grow, food that costs more than U.S. imports only because no government in Canada has the courage to challenge the trade violations involved in massive U.S. subsidies to vegetable exporters and because no Ontario government adopted Drummond’s idea of slapping a carbon tax on trucks carting in things we can grow ourselves.

Using the latest (2006, 2009) StatsCan figures, Alison Blay-Palmer at Wilfrid Laurier U conservatively estimates that just this one form of import substitution (what she calls “redundant trade”) could generate some $4 billion a year of new money. And who knows how that could grow if  Ontario hospitals, universities and other agencies were directed to buy local and local sustainable when available and cost-effective.

Just a start, but better than a logarithm in the eye. Better than unnecessary shock therapy, too.

Comments

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