Calgary, Canada's Fastest Growing City

[mirror]

Tales from boom town

Jim Dinning, who's running to replace Ralph Klein as Tory king-for-life, told me he wants to make education and resource refinement the cornerstones of his administration. In this vision, nothing gets out of Alberta without being processed or refined first -- oil, food crops, beef or brains. "We will be the leading value-added jurisdiction in Canada, if not North America," Dinning said.

Ottawa politicians had better get their act together if they have any hope of keeping a handle on Canadian unity. The West has been ignored for long enough in the Eastern corridors of power in this country, and there is no way this kind of situation can continue. Ontario needs to wake up and smell the oil fumes.

I really like Dinning's approach. Too bad we don't have national leaders saying the same thing about all of Canada.

[mirror]

Here is another article concerning value-added products from a well known Canadian economist. it seems that in some ways he is saying the same things as Dinning. Am I incorrect?:

The Canadian disease?

[Toro]

From Mirror's link

The next day, Statistics Canada reported that Canada's trade balance had slumped to one of its weakest levels in four years.

Germany and Japan have very positive trade balances yet their economies have barely grown over the past 10 years. A trade surplus is not necessarily indicative of economic strength. It can also be one of economic weakness since it may signify a weakness in domestic demand, as it does in Germany and Japan.

We've lost 100,000 manufacturing jobs in two years. Yes, we're getting new jobs in energy and minerals, but only 20,000 over the same period, replacing just one in five vanished manufacturing jobs. Most of our “adjustment” to the sky-high loonie is reflected in a big shift of resources into domestic service industries (coffee-shop baristas, Wal-Mart clerks, truck drivers).

How does he know this is the composition of the service workforce? I haven't looked at the breakdown of the Canadian service labour force in years, but if its like it is in the US, where we also hear the same argument, most of the gains in service employment have not been in low wage jobs.

But these sectors have much lower productivity than either manufacturing or resources, so Canada's average labour productivity has grown by 0.6 per cent over the last three years. In the United States, productivity is up 12 per cent in the same period.

By its very definition, lower productivity jobs will grow faster than higher productivity jobs. This has to be the case, unless there is a great technological breakthrough, since it takes more people to do less productive work. And productivity lags in Canada compared to the US for other reasons. The same forces driving manufacturing out of Canada are also doing so in America.

Economically, Canada has a textbook dose of Dutch Disease. But the scariest headlines of last week came from our policy-makers (not the statisticians). Trade Minister Jim Peterson reaffirmed his faith in continuing trade liberalization. He's especially keen on free trade with Korea, a supposedly “developing” country which sells us cars and buys our beef.

Canada is a trading nation and has benefitted enormously from the global liberalization of trade over the past 60 years.

I'd prefer our policy-makers to lean against market pressures, rather than celebrate them, in the interests of a more diversified, value-added development path.

Didn't work that well in the 1970s and probably won't work well today.

[mirror]

Correct me if I'm wrong but isn't value added referring to manufacturing or processing jobs as opposed to the jobs that are involved with the raw exportation of resources?

My understanding was/is that there are a lot more jobs involved in the value added approach to selling our resources as opposed to shipping them out unprocessed. Maybe a 5 to 1 ratio at least. That is why I like what Jim Dinning had to say and I thought the CAW economist was saying basically the same thing.

[Canuck E Stan]

Mr Stanford is a economist for the CAW, he's probably right about the 10,000 manufacturing jobs being lost. When auto workers earn close to $30 an hour for sweeping floors at the plants and unskilled productiion workers earning about the same, you really have to wonder if GM doesn"t have a point about labour costs. How is Stanford and the CAW going to compete with Toyota(which Mr. Stanford doesn't mention in his article) who has no union and still pays their workers a good wage. Toyota is expanding in Canada and will open a new plant that will hire 1200 people. So why are manufacturing jobs being lost in one area but expanding in other areas? Bad products? businesses being out of touch with their market? Labour costs? China? The manufacturing sector is going down the tubes. Remember the campaign a couple of decades ago "buy the car your neighbour builds" maybe we should support the manufacturing sector more by buying Canadian built goods.

[mirror]

I agree with you that we need to support purchasing Canadian made goods as much as possible.

As far as the new Toyota plant my understanding is that the CAW are going to attempt to unionize it. I would surmise that someone sweeping the floor for $30. an hour is probably doing that for a small portion of their working day, when they are not busy doing something else. How long does it take for someone to be considered skilled?

[Toro]

Correct me if I'm wrong but isn't value added referring to manufacturing or processing jobs as opposed to the jobs that are involved with the raw exportation of resources?

My understanding was/is that there are a lot more jobs involved in the value added approach to selling our resources as opposed to shipping them out unprocessed. Maybe a 5 to 1 ratio at least. That is why I like what Jim Dinning had to say and I thought  the CAW economist was saying basically the same thing.

<{POST_SNAPBACK}>

There is a fundamental premise in economics that the further you are from population density, the less processing that will occur. This is because value-added processing requires human capital, transportation, infrastrucuture, etc.

But the idea of manufacturing as the driver of the economy is outmoded. Its not manufacturing but technology that drives the economy. Manufacturing was the cutting-edge technology 200, 100, 50 years ago, but it is no longer. Cutting edge technology is in services, and it is why knowledge-based production will replace manufacturing. If its doesn't in Canada, then we're in trouble.

[Toro]

Calgary's a fabulous city BTW. Really dynamic.

[mirror]

Isn't that true only up to a point? Doesn't Canada get any economic Brownie points for having such an abundance of raw materials? Seeing as we have all these raw resources on owr soil anyway, are we not better off processing it as much as possible? I'm thinking of for example our logging industry, where it seems we are shipping these raw logs overseas.

And I agree with you about Calgary. My brother lived near Market Mall (NW) and for years I used to visit him often.

[I Miss Trudeau]

I'm thinking of for example our logging industry, where it seems we are shipping these raw logs overseas.

Most lumber harvested in Canada is processed in Canada. For a while, large companies with American divisions like Canfor or Weyerhaeuser skirted the softwood lumber tariffs by shipping "unmanufactured" lumber down south to their mills there. Even then, unmanufactured meant rough (unplaned) dimensional lumber (2x4, etc) and not raw logs.

[Riverwind]

I'm thinking of for example our logging industry, where it seems we are shipping these raw logs overseas.

Most lumber harvested in Canada is processed in Canada. For a while, large companies with American divisions like Canfor or Weyerhaeuser skirted the softwood lumber tariffs by shipping "unmanufactured" lumber down south to their mills there. Even then, unmanufactured meant rough (unplaned) dimensional lumber (2x4, etc) and not raw logs.

My understanding is that most mills would close if Canada allowed unrestricted raw log exports because the price of raw logs on the international market is much higher than the price within Canada. If this is true then our entire lumber industry is an example of a value add industry that could not exist with protectionist policies.

[mirror]

I'm thinking of for example our logging industry, where it seems we are shipping these raw logs overseas.

Most lumber harvested in Canada is processed in Canada. For a while, large companies with American divisions like Canfor or Weyerhaeuser skirted the softwood lumber tariffs by shipping "unmanufactured" lumber down south to their mills there. Even then, unmanufactured meant rough (unplaned) dimensional lumber (2x4, etc) and not raw logs.

<{POST_SNAPBACK}>

Well I remeber when I moved out West and checked into purchasing a chesterfield, sofa, couch, whatever you call it. It seemed they were all built in SW Ontario. I thought that to be rather strange and wondered why we can't build sofa's in the West. Maybe when transportation costs are out of sight, $100. Oil, more things will get built closer to home.

[I Miss Trudeau]

My understanding is that most mills would close if Canada allowed unrestricted raw log exports because the price of raw logs on the international market is much higher than the price within Canada.

Quite probably. Allthough, it costs far far more to ship raw logs than an equivalent amount of processed lumber.

If this is true then our entire lumber industry is an example of a value add industry that could not exist with protectionist policies.

Well, the lumber processing industry, anyway.

[Canuck E Stan]

The reason there are no manufacturers of sofas is that real westerners don't use sofas, no time to sit down. Too busy making $$$

[I Miss Trudeau]

The reason there are no manufacturers of sofas is that real westerners don't use sofas, no time to sit down. Too busy making $$$

Or too busy sitting on bar stools or vlt stools spending $$$, anyway.

[Hawk]

The reason there are no manufacturers of sofas is that real westerners don't use sofas, no time to sit down. Too busy making $$$

Or too busy sitting on bar stools or vlt stools spending $$$, anyway.

<{POST_SNAPBACK}>

LoL yeah dam those Westerners and their drinking... I mean, we are drunk half the time, dumber than a dime, and gamble our lives away.

Yet we still are the richest province in Canada =p

All I can say is this... pwnt

PS Calgary owns, I have alot of family there and visit it a few times per year

[I Miss Trudeau]

LoL yeah dam those Westerners and their drinking... I mean, we are drunk half the time, dumber than a dime, and gamble our lives away.

Well, our gambling rates ARE really high, and I'm pretty sure I recall reading that our alcohol consumption is up there, too.

Yet we still are the richest province in Canada =p

Those vlt's must be paying!

[Hawk]

VLTs might be paying, but not nearly as much as our taxes =p

Not to mention that we all know the Reserves are the capitol of gambling

[kimmy]

Or too busy sitting on bar stools or vlt stools spending $$$, anyway.

Out of curiousity, IMT, have you lived in other parts of Canada?

-k